Going along the example sean gave of the text editor, i was wondering if you can add on to a list the instances where experience prototyping or designing has made a big difference in computers. I dont have that many examples but from the top of my head i can think of –
1. Picassa collage function – Google picassa has this collage function where a new picture can be made which collages a series of picture. It is like taking a picture of lots of pictures put together.
2. Twitter ?
Please add on if you have any..
Interaction Culture 
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I think this is the most important question to be asked, and, it is the question most often ducked.
But I think we apply a little Phoebe Sengers to the discussion here and say that EVERY interface is an experience, and that, some are just bad. We cannot identify good experience design in computer interfaces without having the others to compare it against.
In my comment about Processing’s PDE (Processing Developing Environment), I started out first with the functionless TextEditor that I began programming in (this summer). I hated it. It was just a blank sheet of white that you type code on.
Then I mentioned Dreamweaver. I am sure we have all experienced the user-delight of switching from text editor coding to switching to Dreamweaver.
Processing’s PDE takes this a bit further. Not only is it as functionally/technically helpful as Dreamweaver, but the muted colors and easy ‘play’ ability (embedded compiler) make it an artistic piece of zen that is comfortable to look at (and play with) for hours.
Probably, it’s not a perfect design, and, in a few years there will be better experiences. But temporally, relative to what’s out there right now – so, relative to my situated, temporal context – it’s a delight.
Another one I just bumped into — I somehow clicked back a few web pages when typing this post. I thought “oh no! I bet I just lost all that I typed to Ankit!” However, when I flipped back over, my text stayed here. THAT was a good experience because in many sites, my post would have been gone.
Experience design does not exist in a vacuum (alone); it exists relative to every other choice that is around it.
IMHO
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That is very true sean, i cannot agree more that this is a question that we need to discuss more. I think exp. design in computers is a very subtle but very important thing. I posted this because one of the Interviewers asked me to give examples of exp. design and i did not have that many examples. I am glad i have atleast 2 now š