I loved Are's blog entry! Easy to understand and comprehensive, but one thing not addressed were the issues involved with the VA or FHA buyer (which is what I see the most of). Of course every market is different (I am in Hampton Roads), but having helped a few buyers with bank-owned properties, I know that "as-is" is a relative term.
Most banks have wizened up and realized that to get these homes sold, they may have to work with FHA or VA buyers whose appraisers are requiring a home to be "safe, sanitary, and secure." I am no appraiser, so I am not sure why, but sometimes we get these distressed properties through no problem, and sometimes every square inch of moisture damage has to be replaced before closing. The lender requirement of a clear moisture and termite report is the hardest (read: impossible) thing to get around. So what is a buyer to do? The house has to conform to certain standards, yet the Buyer cannot, even if they could afford it, do the work before closing or pay for it at the table. Here is where a good buyers' agent can shine.
Someone who has negotiated these before will be able to get the Buyers things that will make the house "safe, sanitary and secure" - repair money, new appliances, termite treatment, warranty, etc. Foreclosures are not for the faint of heart, certainly, but with a good agent by your side, you will be grinning ear-to-ear at closing.
Good luck to you and happy house hunting!