> If all users want to install arbitrary applications from untrusted sources well... my first reaction is that the situation is desperate.
All users no, but many do indeed.
As for your reaction, I disagree: if the application is isolated from the rest of system, then it shouldn't be able to harm it.
But there are two big issues
1) providing an isolation mechanism which is "usable enough" that the users won't disable it.
2) having all the normal applications using correctly this mechanism.
Otherwise the user will become used to giving all the right to every applications and no real security is provided..