Lots of us (software developers) are tempted to develop a web application that can be opened on literally any browser and yet with a rich ajax-ian user interface, without considering the target audience and business limitations. This blog post articulates various constraints and offers some excellent real world examples (Gmail, Amazon and 37signals) to consolidate what is better and why. Excellent insights.
Not all browsers have the same capabilities; however, for various reasons, we want our web pages to exploit the cool new technology that modern browsers enable but still have the web pages work in old browsers. We use graceful degradation techniques so the pages work in all browsers.