Here's another sneak peek at some soon-to-be-released functionality that will be delivered with ArcGIS Explorer desktop, build 1700, due out in about a month.
Below we've added a KML showing NOAA Snotel gauging stations to Explorer. We also created a 20-mile buffer around the peak of Redtop Mountain, just north of Crater Lake. The buffered area (shown in orange) was used in a spatial query to select the NOAA Snotel gauging stations in the KML falling within the buffer distance.
The results of the query can be added to your map as notes, and saved as layer packages for use in ArcGIS Desktop. ArcGIS Explorer Desktop can already export any KML as a layer package, and can also convert any layer package to KML.