Seeing as how many novice computer users can't bring themselves to organize their pictures/files/music, I can't see this non-install movement as a good thing.
Just think of your average Windows/OSX desktop, it's usually cluttered with shortcuts, downloaded files, music, photos etc.
Now imagine that with 10-20 application folders (which by the way if you mess with will cause your app to stop working)
We need to help users logically organize their content first, before we can attempt to allow them to pick where their applications reside.
Putting files in folders is a metaphor left over from the way we had to organize physical documents, because we couldn't do any better. The key is to provide easy search and flexible views on top of the data/files users have so they can easily find what they need, not to force users into organizing their files into neat little folders.
OS X gets most of this right because it doesn't care where you put your apps (although /Applications is recommended), applications aren't folder you can mess around with, they are wrapped in a logical package you can move or doubleclick on to open. Spotlight makes it easy to find anything on your computer and most applications are optimized around searching or looking at your data from different views (iTunes, iPhoto, Mail, etc).
I suppose you could restrict programs to only running out of certain folders to centralize it, but I think the only way this kind of thing could ever really get better is a sink or swim approach. As in, if your computer is setup insanely poorly(like if I can't find your programs in the huge mess you plunked them into), don't look to me for help with it, cause I'm just gonna recommend a nuke from orbit approach, with a further instruction to do it right next time. Tough love counts as help, right? Still, I know, I know, it's never gonna happen...
Just think of your average Windows/OSX desktop, it's usually cluttered with shortcuts, downloaded files, music, photos etc.
Now imagine that with 10-20 application folders (which by the way if you mess with will cause your app to stop working)
We need to help users logically organize their content first, before we can attempt to allow them to pick where their applications reside.
Most don't even have a concept of file structure.