Open and Use .osm Files – GIS Application Guide

openstreetmap

A quick question that I don't see an answer to elsewhere: if I download a .osm dataset from Planet.osm (for example) which GIS applications could consume/display this data without translation?

For example, this page says ArcGIS 10 "can use OpenStreetMap as a basemap" – but I'm not sure if that means it will open .osm files or read the data from a service?

So, are there any GIS apps (proprietary or open source) which will read .osm files?

Or perhaps taking a step back: is OSM data meant to be consumed like this, or is OSM meant to be used mostly for dynamic display of mapping on web pages?

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