>I'm not sure what is so special about it? SQL Server allows expressions in ORDER BY clause.

BOL2005 still only lists this as the possible order_by_expression:

order_by_expression
Specifies a column on which to sort. A sort column can be specified as a name or column alias, which can be qualified by the table name, or an expression. Multiple sort columns can be specified. The sequence of the sort columns in the ORDER BY clause defines the organization of the sorted result set.

Absolutely no indication that CASE is a possibility.