I'd love to find out why they changed their approach and applied the rules afterward instead of during download.

Well, as said above, they are seperate clients with seperate development paths, and always have been. Anyhow, Outlook is seen as a mostly Exchange client, and when rules are set, they get sent over to the Exchange server to be run there, thus server side procesisng. This can be changed in the Exchange enviornment, but of course doesn't apply to POP or other accounts. For the most part, POP and other protocals have always seemed to be in Outlook as an afterthought.

The e-mail mess is there even on the Mac side. Outlook existed for Exchange support, while Entourage came around as well for the Mac as part of Office. They were oddly similar, except Entourage never had Exchange support. OS X came out, and an Office X version was released. Outlook never got ported to OS X, and instead Exchange support was (badly) added to Entourage via a free patch. Mail, the built in mail client of OS X added Exchange support as well in 10.3, so some people never even bothered to add the support to Entourage. The bad part of the Exchange support in both clients is that they have to have a recent Exchange server to connect to, and with IMAP and web access turned on.

MS E-Mail is a mess period. It's just a shame most ISPs do not offer IMAP mail these days. That, combined with server side filters can simply clients lifes quite a bit, since their mail is there no matter what e-mail client is used to read it.