P2PQ is an example of the sort of thing that I imagine Tim O'Reilly means by "embedding people in applications". It's an attempt to build a human-powered P2P 'search engine' - a sort of Wikipedia / old-school Napster / ICQ hybrid, if you like.
Of course there are plenty of (mainly) special interest, expert- and community-based based advice networks out there. What P2PQ seems to be attempting is to bring this to a general audience - and, if their plan is to be bought out by Google* at some point (a la Orkut), then they may well be on to something!
P2PQ 'web' in its current form actually looks to me more like a toolbar app that could be rolled out to an exisiting community, or a feature that could be added to one of the plethora of social networks - but it seems unlikely to achieve the critical mass required to make it a humanly useful tool if propagated along current lines. The problem they face is deep and possibly insurmountable - how to motivate people to provide quality answers to questions from strangers?
[I note with interest that there is a P2PQ 'Business Edition' that adds features to make it into a 'knowledge aggregator' - a smart way to bring in maintenance & development funding in the short term, and a good fallback position ("it's a dynamic meta-FAQ tool") if P2PQ 'web' doesn't take off or become self-supporting...]
I'm interested in the approach, though, because it attempts to find a use for P2P beyond the massively predominant file sharing. I feel there are *significant* benefits to be had from sharing, but am personally more interested in creating new types or categories of 'files' to be shared - aside from linear audio & video, or chunks of executeable code (i.e. 'warez') - than modes / networks / platforms for sharing.
Knowledge is one such category - so I wish P2PQ well, even if I'm unconvinced by the growth & motivation models implied by their website - and so, I would say, are mood/emotions and quality of life decisions. Finding ways to harness genuine self-interest is one key, I believe, to building long-lasting, useful and ubiquitous 'human applications', and may actually provide a serious - and more trustworthy! - alternative to market-driven (i.e. "show us the money") proprietary or Open Source approaches.
*Another sign that Google = the new Microsoft? Hotmail's acquisition by Microsoft in '98 dramatically illustrated that the 'trade sale' could be (almost) as lucrative as the IPO, if you've got your technology right and enough of a jump on the big boys. I certainly get the feeling that these days, people are setting up companies with the intended 'liquid exit' being acquisition by Google. Be interesting to see how this works out post-Google's IPO...