The proposed solution to this quagmire is WHAT WG, the Web Hypertext Application Technology Working Group. Announced just a few days ago, the group "aims to develop specifications based on HTML and related technologies to ease the deployment of interoperable Web Applications, with the intention of submitting the results to a standards organisation". The plan seems to be to develop new extensions to HTML 4 in an open environment, while avoiding breaking backwards compatible with the ever-present Internet Explorer. This group is no fly-by night organisation of hot-headed web nerds: the current membership includes key representatives of the Mozilla, Opera and Safari browser teams, most of whom have experience working on W3C specifications. They're running an open mailing list and already have an initial draft document for Web Applications Markup Language 1.0, their first proposed specification. WHAT's going on? - SitePoint DHTML & CSS Blog
This is something I'm going to start tracking. Recent first-hand experience working with web applications shows me that browsers have some serious limitations. Flash apps like Flickr have done a good job overcoming some of them, but I think a higher level of "desktop integration" (for want of a better word) is needed.
It's no accident that they chose the name WAML: these vendors have teamed up to produce an open specification in direct competition with Microsoft's XAML . Or as Simon Willison called it when it was released, "Microsoft's XUL". With the Mozilla team on board, I expect a lot of the XUL work to be folded in here. Heck, this might even just be a XUL re-branding exercise.
Amazing: I first talked about XAML about 600 posts ago, in October of 2003. And of the two options, "Develop a compelling alternative platform" is what this announcement heralds.