Maybe I didn't explain it well here before, I could have sworn I did recently - maybe it was in the beta thread - or maybe I'm just imagining things .Oh... my bad. Sorry. I don't think this was properly explained before, or at least in this thread.
Yes there is, its used all the time, particularly with modifier keys like ctrl,alt,shift! You may not have much use for it but XMBC is used in many many different ways by many people!But then I wonder if there is any real use for mode 3 when it comes to Windows applications, or even games.
I'd say particularly in games where you use keys to (for example) move, holding say W to go forward, you don't want to repeat it (on, off on off) over and over - you would move, stop, move, stop, move, stop and so on - where as with method 3, it would hold the move key until you released the button - smooth forward movement (no repeat required).