VS Shell is a free version of Visual Studio designed to be used as a framework for developing applications. Applications are built as add-ons for Visual Studio Shell, which can be distributed royalty free.
While applications do not have be of the compiler/IDE variety, they are the natural target for VS Shell. A notable example in the end-user space is the Add-on Studio for World of Warcraft.
Add-on Studio for World of Warcraft was developed in roughly two weeks by two developers. Features include a visual design surface and auto-generation of table of content files.
One of the more impressive features is how easily Intellisense for Lua was added. Lua is a scripting language popular among games such as World of Warcraft, Dawn of War, and Far Cry. Property and event panes for Lua are also supported.
An introductory video is available on the VSX team blog. The source code is available on CodePlex.