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Tom has answered with many of the reasonsfor virtualizing applications.
I work in a very large enterprise environment and one major drain on resources is patching desktops - OS and applications.
By decoupling the application from the OS, I have the ability to have master images of each - 1 image to patch instead of 30,000 desktops to patch - which includes the infamous problems of laptops that are on again/off again connections to the network.
BTW - I know I am echoing MS's presentation on why to virtualize applications but it makes sense and I expect it to be the future of computing.
Lesser concerns include legacy applications that we just "can't" get rid of for operational issues -- need some way to provide those 8 bit applications to the 32/64 bit desktops and the ability to define by policy who gets what application and how many copies are available - more control in software licensing.
HTH
Mike