As a desktop developer I might be biased, but I'm still trying hard to understand whole web 2.0 buzz. We can "thank" to major factor in the industry for most imaginative ideas - Google. Personally, I'm not thrilled with Microsoft and it's philosophy, but microISV are greatest victims in the war between those two.
Of course, I can see the advantages of web services
for meaningful purposes (web 1.0 or web 2.0, whatever), but sometimes ideas go too far in my opinion. I don't want to install an desktop application just to order food, find a rent-a-car or a hotel room, but I definitely don't want to use a third-party (and untrusted, should I say) web service for keeping my confidential personal or business data. Google already knows my searches, sites I visit, part of e-mails and feeds that I read (my latest stumble, ahhh); should I now let them know about visitors at my web site, letters I write, appointments and spreadsheet calculations? What's next? Google Budget? No, thank you. I'm not a paranoid, otherwise I would not use even G from Google, but line must be drawn somewhere.
I'm biased, alright, because Google attacks towards Microsoft can well be interpreted as attacks towards our company.
First, Google buys Urchin (previously a high-end and expensive product) and lets anyone use it (Google Analytics) for free, which directly competes with our product Web Log Storming. And second, their Calendar competes with our Agenda At Once. It's alright, I'm still not hating, but if they create web based label designer, I will be really P.O'd...
OK, now this became Google rant instead of Web 2.0 rant, but you got a message anyway. As a conclusion: I don't think that whole this buzz is generally a good thing, but I don't think that it will fall down miserably anytime soon - Web 2.0 can have a meaningful target, and, also, very powerful players are behind it. Still, a vote for a "joke/hype/bubble/fad".