I think it's all going to depend on how much Longhorn is going to suck. It sucks as it is.
Too much DRM and NGSCB, and a 3 GHz minimum system requirement. Longhorn is so bloated that Microsoft had to hire former Be programmers to fix them a SQL-based FS called "WinFS", to further index their complex structure.
The only thing for Microsoft to save themselves is to throw out that Windows NT junk, and start all over with the former Be programmers as project leaders. They can keep NT for their server OS, because it's (almost) working for servers (not as good as UNIX though, but at least they tried).
But servers don't matter much though, their two most major products - Windows and Office - is what they should pay their attention too. And as of now, they're really screwing up Windows beyond being worse.
Don't matter, Linux is increasingly becomming better by the day, and has a very good chance at defeating Microsoft at the desktop platform.