When and Where to use SharePoint SDK

In addition to standard SDK, SharePoint supports web-services, front page rpc and webdav(on front page RPC). How do you decide, which one is appropriate for your application? . To make it simple, I have put together a following matrix

Type	Purpose
SDK	When you application is hosted on the same box as SharePoint , it makes perfect sense to use SDK. SharePoint SDK requires the SharePoint to be installed on the same box.
WEB SERVICES	Now a days, Web-services makes sense for any application.Most technical and non-technical folks seems to throw this key word to show off their grasp on latest happening in technology. In case of SharePoint, web services makes sense when application is interacting from a different machine or network. The appropriate applications would be .NET application on a different machine Interaction from non .net application such as Java or Perl Access over internet (for SaaS)
FrontPage RPC / WEBDAV	SharePoint interacts with all Office clients mostly with Front Page Remote Procedure Call (FPRPC) and Webdav. If you are writtign a custom client or an integration for non-microsoft clients, this is your best choice. If you need more information on how to create handle front page RPC calls you you will find following links useful SharePad : is an open source application, designed to give more inside into how one can consume FrontPage RPC. Overview of the SharePoint Team Services Architecture