If you're creating an application where connecting on the "root domain" matters it can be problematic. For example, imagine you were creating some URL rewrites using apache's mod_rewrite and they worked for http://some.domain.com/rewrite-goes-here/ you would have to do a bunch of extra work (or an extra set of rules even) to make that work also for 10.0.1.1/my_app_without_vhost/rewrite-goes-here/

When you're testing on your LAN using a PC/mac or whatever you can do a local DNS modification on the machine (eg. /etc/hosts) but when you're testing from an iPad or some other device this is either impossible or prohibitively difficult.

The other option is to setup a DNS server on your LAN which is a headache all it's own - this is a very simple and elegant way of circumventing these issues. Awesome stuff.

You really should develop your apps so that they are path agnostic. And the mod_rewrite rules can be fixed with a simple RewriteBase declaration (RewriteBase /subdirectory). I've never found this a major problem that requires a DNS server to fix.