Virtualization

As far as I know clickonce applications, they allow you to dynamically update an application by changing the repositories on the server. When a user clicks the clickonce shortcut, the most recent versions of the files for the application will be downloaded from the server before starting the application. While this is a good way to ensure that users are always running the latest version of an application, I don't see the isolation functionalities in it that App-V brings.

If you want to offer App-V, the isolation functionalities are a bonus. IMO however the technology still has some key weak points (shell extensions immediately coming to mind) that will force you to go for MSI solutions for a reasonable percentage of your applications still. I just heard the initial numbers on the project I'm on atm, and they're around 60% APP-V, 40% MSI. They'll probably skew more towards the App-V side in time, but like you see, still a significant percentage of applications that cannot be virtualised.

Just my 2c

PJ

Microsoft Application Virtualization (also known as App-V; formerly Microsoft SoftGrid) is an application virtualization and application streaming solution from Microsoft. It was acquired by Microsoft during the acquisition of Boston, Massachusetts-based Softricity on July 17, 2006.

ClickOnce is a Microsoft technology for deploying Windows Forms or Windows Presentation Foundation-based software, also called Smart clients. It is similar to Java Web Start for the Java Platform.

ClickOnce is for very simple installations: specifically .NET Framework-based smart client applications that don't have sophisticated configuration requirements.  No registry entries, no NT services installed, no self-repair, no GAC installs, etc.
 
ClickOnce-deployed applications are installed per-user, not per-machine. !!!!!!!!!

See http://msdn.microsoft.com/en-us/library/ms973805.aspx for more detailed info, and especially look at the table of differences between MSI and ClickOnce.

I think you should offer all three technologies, but use ClickOnce for the very narrow set of installations it was created for.
Rob