When I ran CRM 3.0, I had set the AppMode key in the CRM web.config file to Off. This causes CRM to display in a regular Internet Explorer windows. With it on, CRM strips off all the IE stuff and only displays CRM. Unfortunately with IE7 it also caused an additional windows to open asking you to confirm that you want to close the original window you're starting from. This can be a bit of a hassle for some. Plus, with AppMode off, IE7 can put CRM in its own tab.
When I installed CRM 4.0, my system once again displayed in AppMode. I pretty much put up with it, meaning at some point to go in and edit the web.config to turn it off. Today a newly upgraded CRM 4.0 client requested it be turned back off. No problem, I'll just go in to the web.config and set it to off. Well, search the web.config as I would, I could find no AppMode key.
My good friend Derik Stenerson at Microsoft came to the rescue. Seems they've moved it. Now it can be configured from the CRM web client. Simply go to Settings -> Administration -> System Settings and click on the Customizations tab. At the bottom you will see a section for Application mode. There is a check box for Open Microsoft Dynamics CRM in Application mode. Uncheck this to turn off AppMode.
Thanks, Derik!