Portable application is a different form of a normal software.The difference is that we dont have to install it like normal software inorder to use it,but can run it and use it like a installed software.Now most of the softwares are releasing their portable version.
Usually we install a software in order to use it.In portable application of that software a compressed zip file will be the installation file.When you click on the zip and unzip it the software will be temporarily installed in the computer.You can do all the functions of that software and once you close the window no trace will be left by the software in the system.Even registry entry will be erased.
for example lets take a file recovery software RECUVA
http://www.piriform.com/recuva/builds
we can see different kinds of installation file like
INSTALLER
PORTABLE
Download the portable version and put in a pen drive and carry it.
Suppose your friend is crying for a lost file because of accidental deletion.You can come as a rescuer.You will put your pen-drive on his/her system,run the portable application.Recover file and close the program!!
Thus for people who dont know about a recovery software your action will be like a magic!.They wont understand what you have done and no traces of that software will be in that system.now thats cool!!
There are many such portable applications.Even browsers like mozilla firefox are available in portable form.When you browse from Internet cafe you can use it.
for more portable application visit http://portableapps.com