neilh wrote:. I think this is what makes it possible to launch applications from files or URLs by clicking on them (or possibly by right-clicking on them and bringing up the service-menu list, depending on your desktop setup).

Yes, this is why the %u or %U is used in the MIME type settings, so that when you click on an .mp3 file, for example, the desktop environment knows to pass on the filename to the application.

What I am trying to figure out is why it is included in the application launcher, which is just used to launch Amarok independently of any file (removing it from the line has no effect on the launching of Amarok).

It is likely included in the application menu command because the file association and application menu entry likely share the same command - because they come from the same *.desktop file.