Alzheimer's disease is a neurodegenerative disorder that is the result of a build up of protein in the brain. It is difficult to treat with stem cells because it affects the entire nervous system not a specific area. However it appears that much of the loss of cognitive function in Alzheimer's disease is the result of damage to areas of the brain that use the neurotransmitter Acetyl Choline. These projections seem to be involved in alertness and memory functions.
Grigoryan et al. lesioned these areas of the brain in order to simulate the effects of Alzheimer's. Then they grafted neural stem cells to the cites of the lesions. They found that the rats with the stem cells grafts improved on memory task. Furthermore they found that some of the stem cells moved to areas that they were not implanted in, but were also lesioned.
The finding that neural stem cells can move around could have both good and bad consequences for the effectiveness of treatment. It would be useful if they moved to the site of damage, because they would not have to be implanted in the exact site of the lesion. However, if the stem cells moved away from the area you wanted them to go to, it could be hard to control what the stem cells will do.
see the Alzheimer's page at The Undergraduate Behavioral Neuroscience Resource Project.