I’ve been following a lot of software on the web, and it’s almost always been disappointing. I was quite shocked when I first hopped over to Pixlr. It has a lot of the polish for a web app. And a very familiar interface including a menu bar, tool and layer palettes, etc.
Granted, I will always opt for real software where it’s available, but if Pixlr is any indication of where internet applications are going, then I expect to see a great deal more of them in the near future.