Last month we got 688,000 new blog posts via XML-RPC, so desktop clients are still meaningful. (XML-RPC API is also used by other folks like Flickr.) APP may be better, I don't have a strong opinion, but it's hardly used and in fact we had trouble finding clients to test with when writing support for it. Regardless, we try to have the best support for APP possible.

Same thing with feeds -- we offer every feed in a choice of 4 formats (two Atoms, two RSSes). It's the same content and there's no overhead to us (it's just a template file) so why not let people choose what they like best.