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To me, a website is a website. Just because it has forms, uses the "cloud", and has a shiny logo doesn't stop it from being a website. The only websites I use that are anywhere close to "application" functionality are GMail and thesixtyone, and even then it's just ajax frosting on top of a delicious html cake.

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I fail how to see how using HTML and Javascript keep something from being an application. To be an application it has to run on the desktop, and not the browser?

It's about level of interactivity, responsiveness, and robustness. Shiny web front-ends to a relational database just don't compete on the same level as desktop workhorses. Mint, Gmail, and Freshbooks are nice web "applications", but their innovation is in solving simple problems with incredible interfaces. The innovation in Textmate, and Photoshop is that they enable a high amount of manipulation and automation that simply can't be delivered over the web at this time.

To be an application, you certainly don't need to meet the levels of interactivity, responsiveness, or robustness as Textmate or Photoshop. Maybe to you that's what an application is, but under a more standard definition all a piece of software needs to do to be considered an application is to interact with a user to do a specific task. It has nothing to do with value judgements. A crappy cgi guestbook is technically a web application. It doesn't matter that it's slow and only does one thing.

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