This would be ideal for supporting Private Messages.

Consider: A user is browsing a site. They get a Private Message from another user, elegantly brought up in a jQuery alert off to the side of their screen thanks to PMgrowl's use of overlays. The user clicks reply... and is redirected to a full-page form to enter their reply.

How much better for them to simply be able to click Reply, and have the form appear as a Block while the user remains on their current page. Drupal already has modules that will bring up a Block at the click of a menu link - and if Privatemsg's reply form could be a Block, all would be well.