Farallon Geographics Builds Web Based GIS Redevelopment Project Tracking Portal for Boston Redevelopment Authority
Check the press release here: http://www.fargeo.com/company/press/2007/03/farallon_geogra_2.html.
This is a great example of how Virtual Earth can help in government applications. You can see screen shots of the application via the link which illustrates the use of pushpins, vector line and polygon drawing, raster overlays, Bird's Eye imagery and 3D all integrated into a site with an existing application. You can extend the use of your applications by integrating Virtual Earth via the APIs.