What are Data URLs in IE8?

Interesting new features in Internet Explorer 8: Data URLs. According to the documentation, "Data URIs offer Web developers the opportunity to embed small external resources (such as CSS files or images) directly into a URL on a Web page."

For example, if small (or even larger ones?) images would be embedded into the HTML file and then stored in memory, advanced AJAX web applications could operate very nicely without an Internet connection. Sounds like a simple method to package web applications, sort of. CAB and JAR/WAR files come into my mind. See for yourself.

By the way, while I'm at it, here's a document listing what's new in Internet Explorer 8.