Picture windows get their name because they were designed to give you an unobstructed, clear view of your surroundings, the window frame acts as a picture frame for your exterior scenery. They are used in rooms where you want to preserve the view of the outdoors, be it your yard or the view in the distance.
They are also utilized when there is a large window opening in a home. Operational windows can only be used for certain window sizes, as their moving sashes will eventually become too heavy for the window frame. Picture windows on the other hand can be used for any size window, from the extra small to the extremely large.