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if you're selling code and actually shipping that code to the client AND it has open-source material (with a license requiring it, a la GPL) then you have to open source all of your material as well.

if you're running it privately theres no need in most cases.

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Thus the reason the AGPL was created, although hardly anyone uses it (to my knowledge).

There's a reasonable number of projects using it, though not nearly as many as other licenses. Some that come to mind: Gitorious, Launchpad, OTRS, MongoDB, StatusNet.

Diaspora is on the AGPL, so that Facebook won't be able to use their code.

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