The Context of Use is the actual conditions under which a given artifact/software product is used, or will be used in a normal day to day working situation. It is important to carry out usability tests, prototyping sessions, meetings, user studies and other "user-dependant sessions" in the context of use to get as high ecological validity (see this) of your findings as possible.
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As a rule, software systems do not work well until they have been used, and have failed repeatedly, in real applications.
-- Dave Parnas
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Eva Hornecker explains the evolving concept of Tangible Interaction.
Read Eva's insightful entry here..