What is so new about indicators?
What did we have before?
Are there technical or usability differences?
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Basically, The system tray is an application running on a given X screen that can display small icons provided by running applications. Windows XP calls this feature the notification area. The concept of System Tray is very well documented by freedesktop.org.
Here is the documention for indicators:
Indicators are ways to group applications that have some similarity - or belong to a family of applications with a degree of similarity - in a single system tray, improving usability. Let me try to use an illustrative image:
This indicator works as a proxy (central point sounds better) to different applications that keep a similarity: all are related with communications. You can use the same indicator to open and send emails, or to chat with some friends, browser your contact, or access twitter. All indicators are groups of system trays.
BTW, I really like the idea of group system tray tasks into the same indicator. It's a huge usability improvement :-)
Indicators is a project of the Ayatana team, focussed on usability and design. The indicators they have invisioned to replace the traditional "system tray" have the following goals:
Support for KDE and GNOME
Creating a space for innovation
Cleaning up the clutter
I know this question has been answered a lot of time, but here my own answer :)
The main difference between the "system tray" and the Indicator applets is that "tray icons" are application-wise ( so one icon per application ), while Indicators applets are task-wise ( so one icon per task ).
System tray Example:
Launch Banshee and Rhythmbox and you get 2 tray icons, with different options and usage.
Indicator applet Example:
Banshee and Rythmbox should integrate with the same indicators, with same icon, options and usage
Obviously you can abuse of Indicator applets ( like the StackExchange or Ubuntuone one :P making them one per application. That is wrong. )