I think Prolog still has a place in modern software development. It provides a natural way of carrying out a backwards chaining depth first search through a state space (good for game AI, planning and scheduling etc). Also constraint solving is a very useful feature built into most logic programming languages now.

Prolog pureists argue that the whole of Prolog can be used for applications, but I tend to take a different approach that integration of Prolog with other languages can help you to do the things its really good and you can get the best out of multiple languages.

That's why I developed a (now open source) platform for integrating Prolog with other applications via web services... see http://kms.intelligent-architectures.co.uk/