Psych Desktop is an open source web desktop licensed under the GPL version 2. You can use it to store your files and access them on the go without carrying a USB drive. You can also run programs from the desktop to view and edit the files. Think of it as any other desktop, but on the web.
With Psych Desktop, you can choose your theme, and wallpaper. You can install additional programs and themes, or make your own.
When properly set up, Psych Desktop is very secure. Your password is encrypted, and your files are not publicly accessible. It is also open source, which means that everything we write is peer-reviewed.
Psych Desktop does more tasks on the client then on the server. This means there is a minimal amount of load on the server, making the desktop very scalable. In most cases you can install it on an old server and it will not have a large impact on speed.
One of the best things about Psych Desktop is that anybody can help make it better. You don't necessarily have to know how to program in order to contribute. Even small things like feedback and bug reports help.
Ok, so we should be done with 1.0 in about 3 weeks.
Here's the major tasks on our todo list still:
You can find the full list here.
Psychcf just finished writing a twitter applet for the desktop. It remembers your login info, and encrypts it before storing it. You can also post updates directly from the applet. This is a good example of how an app/applet can use api.xhr to make cross site requests and utilize 3rd party RESTful apis.

We finished moving onto the new SVN server:
For anonymous access: http://svn.psychdesktop.net/
For developer access: https://svn.psychdesktop.net/
Note that the trac file browser will not work, as we are moving to new servers (the site is on the old server, while the SVN repos are on the new server), and I don't feel like setting up svnsync all over again.
Also, the demo will not be updated until the server move is complete. (however, it will still be working)
Enjoy!
As of today, all future revisions or releases of Psych Desktop will be licensed under the AFL. This does not include alpha 1, that will still be licensed under the GPL2.
Also, we're in the process of moving svn servers. If you are a developer, please don't commit anything. If you are a user, you may continue to take checkouts from the current server, however when we post up the new server information you have to use the new repository if you want to get the latest copy.
The documentation section of our site was redone using dojo's jsdoc utility. It is much better suited for us, as it specializes in javascript documentation where the old system was only a general documentation system. Take a look: http://docs.psychdesktop.net/
This is a bit old, but for those of you who have not noticed, you can type an ftp url into the file browser and you can browse the files on the server. The url can be something like ftp://user:pass@server.com:21 if you need to use a special port or log into the server first. You can also edit files directly from the ftp server, and even drag and drop works! Any application already written for the desktop has support for this, and will also support additional protocols once they are written. Take a look!

A file browser for cell phones and PDAs is now in trunk. It allows you to download and upload your files from/to the desktop. You can take a look at a demo here: http://psychdesktop.net/desktopdev/mobile/
You can log in using the username 'demo' and the password 'demo'.
Thanks to nefariousD, we now have a minesweeper clone in trunk. This uses dojo.gfx to draw everything (except for the toolbar) and is a great example of how you can mix dijit widgets with dojo.gfx. You can check it out in the demo installation we have set up if you don't feel like installing the development version.

Last night we got localization via dojo.i18n working. We're currently in the process of setting everything up to be localized. If you speak english and another language we would love for you to take an hour or so to write a translation for us, please let us know. Just make sure you've signed a CLA and sent it over to the dojo guys. We'll get a page in the wiki on how to do a translation as soon as we get things working.
We started to get the apps localized. Most things are working with the localization system now, except for the apps. Now we just need to write a few translations.

We have decided as a team to rewrite the entire javascript portion of Psych Desktop to LOLcode. LOLcode introduces many intuitive features that assist with:
We're really excited to start working on this. There's a LOLcode to javascript converter, so it will still be able to run in the browser. We think this will benefit us so much that we will rewrite the entire dojo toolkit in LOLcode! Because of this, it may take us longer to release alpha2 then we expected. Come back in a few years and we should be done.
--The Psych Desktop Team