After reading an essay by Bruce Eckel about how great Adobe Apollo was going to be, I had high hopes for the product. But after reviewing the alpha release, those hopes were quickly dashed.
Apollo represents a new breed of applications that erase the line between desktop and web applications. For lack of a better name I call these "Webtop" applications. In theory, you could write an application once and deploy it on the web and on the desktop with minimal modifications. Speaking as a developer, this sounds great. Unfortunately Adobe's implementation leaves much to be desired.
The biggest problem is the licensing. Apollo is a closed, proprietary system by intentional design. The runtime is closed, and the tools are expensive. While there is a free toolchain available, any serious development will most likely require the commercial tools. And don't hold out too much hope for significant open source competition. Adobe's licensing terms, which you have to accept to use their runtime and SDK, specifically prohibit it:
...Any such information supplied by Adobe and any information obtained by you by such permitted decompilation may only be used by you for the purpose described herein and may not be disclosed to any third party or used to create any software that is substantially similar to the expression of the Software.
Adobe is hoping to leverage its tremendous success with Flash into webtop application development. Since Adobe is largely a tool company, their business model is to sell programmers lots of tools and upgrades, locking them into the Adobe brand. It's a fine business model if you can pull it off, but today's Web 2.0 developers are savvy and spoiled by free tools and libraries.
I think webtop applications represent the next natural stage in the evolution of software development. Apollo will serve to stimulate more discussion and innovation in this area, which is good. But until Adobe loosens the reigns on Apollo as Sun has with Java, then it's unlikely to attract much more than a niche following.