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>> I was able to move applications between the desktops
The Desktops utility page itself (http://technet.microsoft.com/en-us/sysinternals/cc817881.aspx) states...

"Desktops reliance on Windows desktop objects means that it cannot provide some of the functionality of other virtual desktop utilities, however. For example, Windows doesn't provide a way to move a window from one desktop object to another..."