> But of course, doing that requires application level support, or at least low-level hooks into the desktop rendering system to extract video streams and treat them differently from everything else.
That's exactly what RDP does on Windows! I don't know the extent to which controls it supports rendering on the client, but the concept is that RDP is aware of things like text, buttons, title bars, etc., and is able to tell the client things like "draw a button at (20, 140)" instead of sending the raw pixel data. With enough engineering effort (and some standardization on the application UI side) I totally think Microsoft could make RDP the protocol of choice for virtual desktops.