Already there's some great discussion happening regarding Ebrahim Ezzy's post on Read/WriteWeb entitled Webified Desktop Apps vs Browser-based Apps. As I noted in the intro to that post, in some ways Ebrahim's views contradict my own.
I'm a big fan of the concept of the browser as a 'lowest common denominator' platform for the Web. And there is a lot of innovation happening in the browser space right now - Flock, Opera, Firefox and even IE7 is doing its bit to keep up (although we're still waiting for some truly original knock-yer-socks-off features from IE7). So I like to think there is plenty more innovation to come in the browser - and imho the WebOS players are one of the more interesting set of startups using the browser as a platform. I also like the technology being delivered by Personalized Start Pages and associated widgets (Pageflakes, Netvibes, et al) and Web Office contenders (Zoho, Zimbra, ThinkFree, et al).
Having said that, I do recognize that the browser has its limitations and that Ajax isn't the be all and end all of interactive technology. My profile of the upcoming NY Times Reader showed some of the possibilities of a web-enabled desktop app (or a webified desktop app, to use Ebrahim's term). Times Reader has rich functionality, courtesy of Microsoft's Windows Presentation Foundation technology - but it also relies on the Web to get the NY Times content and to communicate with other people (email a story, for example).
Other discussion on Ebrahim's post:
There are other great comments to Ebrahim's post and I encourage you to leave your comment there too. Perhaps the biggest point to make is that it's not either/or, despite the headline I wrote for the previous post! There is a place for both webified desktop apps and browser-based apps. Indeed the browser is basically just a desktop app at its most generic.
The biggest advantage the browser still has though is its ubiquity on computers - and we'll continue to need common Web platforms, that utilize web standards, for quite some time yet.
UPDATE: We've published a poll, for you to tell us which type of app you prefer - desktop or browser-based.