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I agree that CD distribution would be a waste, if not litering (see "AOL Disk Collecting); however, I find the ability to keep my web apps portable and separate from a specific host refreshing. I use flash drives, that way I can simply borrow or swap in order to patch/update.
While I find this method useful for personal use, a few friends, & family I see no merit to any commerical endeavor given the ease and availability of an internet connection. If they want to shop, they can simply lift their phone to eye level or pull the ol' lappy/netbook out of it's bag.
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