Underneath it says: Indicates whether the application can be added by the users to their home/profile surfaces. Also controls the ability of the app to be visible in the app gallery.

You turn it off, and the Categories and the install/uninstall callbacks go away - makes sense. But so do the Canvas/Profile/Home source text! How's an app supposed to work without them?

Our situation seems like the quintessential application: our app is part of a larger project; when we send the user to this special URL, they get the canvas page with our app doing stuff, yada yada. Whether or not the user has the app installed. Installing does nothing except put Home and Profile boxes in those pages with, kind of an ad. Kindof doesn't make sense for our application to install it.

But it's installable cuz there's no other way. Then we handle installation, minimally, cuz there's no real way to stop the user from doing so, we just go with the flow.

I get the feeling something else was envisioned for not-Installable.

 Maybe used for external only applications?  Like an application that utilizes myspace data without the user actually navigating to myspace.  Just a guess, but it seems to make sense if you want to control how your app is installed or activated outside of MySpace.