>>I have heard some people advise against the use of HTML in the 
Application.cfm file.

Like many "Never do" or "Always do", this is purely a matter of religon ;-)
The only reason for not putting HTML in Application.cfm, is if the code 
is not intended to be used
in every page.
I would even say that keeping the display code separated from the logic 
by principle, is againt the basic philosopy
behind CF and its nature.
CF is a *dynamic HTML language*, the "logic" is in the "dynamic" part, 
so trying to separate
the dynamic from the HTML is nothing but that some sort of academic and 
idle exercice.
Furthermore, CF is THE language in which the HTML and the logic are THE 
MOST integrated,
and this is one of the main reasons we all like it so much, so why going 
against it?

This is my opinion,... and I share it ;-)

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