This concept in essence runs an application, say Office 2007, on a server, completely segregated from everything else around it. All virtualized applications run in their own space, essentially eliminating any compatibility conflicts. Legacy applications can even run side-by-side with their more recent counterparts. When a user clicks the icon on their desktop they receive a virtual instance of the application streamed from the server, but it is never installed, even though all the processing is done on the local machine. This is a great way to simplify desktop deployments. Install and update only one instance of any application for any number of users.