It is exactly that, though AIR also provides desktop-level capabilities like local file and device access.

AIR is another attempt at the age-old "write once, run anywhere" concept. One reason I left HTML/Javascript web design and got into Flash was that I wanted the incredible luxury of writing for a single platform with a single set of implementation quirks; AIR is an attempt to extend that luxury to the desktop.

It's got quite a few steps left to take; the runtime install is seamless and only happens once, but the app install screens are needlessly scary, as we've discussed before. Still, for many situations AIR is not an unreasonable choice.