With Ubuntu 7.10, I've come to believe that Linux is beginning to come to its 'tipping point' where it will be a viable desktop OS for your average computer user. The only thing holding it back is lack of application support. More and more though, the open source/cross platform alternatives have gotten so good that I prefer them to the stuff Microsoft is offering. Firefox and Thunderbird being notable examples, but I have many more.
Now, that doesn't help you one bit if your work demands that you run some obscure windows app. There's a general trend these days though, (greatly helped by the strides OSX has made to become the 'cool' OS) to make systems open and inter-operable. Virtualization is also becoming mainstream useful, as people buy puters with more cores than they know what to do with, and need to run 2 os's simultaneously. (I'd kill for VMware Fusion on Linux)
The point is, a large number of computer users need 2 things, a browser and an email client (sometimes just the former!). A slightly smaller number need those and Office apps. I guess depending on how you feel about open office, that's the line where Linux adoption falls. MS is offering Office for mac again in '08. If Linux tips far enough, I'm sure they'll sell it there too. As Google continues to add things like docs that will take a chunk out of that argument as well. Yeah, it's not like running the app locally, but you can't collaborate in real time locally either, it's a pretty good trade.
We've hashed this one to death, and I just rambled for a page or so, but I wanted to roll it here a bit for posterity. : )