People need to stop comparing online poker with live poker. Saying software isn't allowed live and therefore shouldn't be allowed online is simply ridiculous.
Playing live, you have access to physical reads that you do not have online. You're also typically facing a smaller player pool than online (unless you're playing nosebleeds), and a comparatively far smaller number of hands played.
Online you're potentially playing order(s) of magnitude more hands against that much larger player pool, and you have no physical reads. With the exception of chat tilt, you have no idea the mindset of your opponent -- you're reduced to betting patterns and timing. Tracking software simply evens that playing field. It would be no different than taking a notebook or tape recorder (Gus Hansen anyone?) to the live table with you and manually keeping it updated as you play, which btw is entirely within the rules. The manual approach isn't possible at online volume and speed, therefore an automated means to keep up with both yours and opponent's stats is an incredibly useful tool. And when multi-tabling, a HUD is almost a requirement to be competitive and profitable.
Finally, there is the immense benefit -- many will argue the best benefit of all -- of not even using the tracking software to track opponents, but to analyze your own game.
Nobody here is advocating the use of software that makes decisions for you. Those are obviously banned by virtually all reputable sites. Likewise nobody here is openly advocating datamining, which is also a TOS violation at most sites. But capturing your own stats, and stats on the opponents you face and using that yourself to draw conclusions about how to play against them is absolutely standard and to suggest it's cheating or somehow underhanded is ridiculous IMO. It's a tool that's available to
any player, and almost without exception the only people complaining about it are people who either (a) are old school and averse to any technology, (b) just don't understand it or are grossly misinformed about it, or (c) don't have the desire or
bankroll to pay for them. Usually some combination of the three.
As far as the top nosebleed players using software, no, it's much less common there, especially for those that had already been crushing live. These guys play the same players over and over and have developed skills that transcend any benefit that most software would provide. That said, many have said they've used tracking software while working their way up online, Durrr being one.