[veddox]

Personally, as a user, I much prefer desktop applications for software of any serious complexity. It's just that much better integrated into the system UI, there's no lag, and best of all: it's running on my computer. (Aside from privacy concerns, I often don't have Internet available...)

For developers, though, I can see why webapps are so much nicer to work with. (See patio11's blog post quoted by drdrey.) So I would posit that the defining metric is complexity: if your software is really complex (and/or doesn't need a server), make it desktop. Otherwise, go for the web.