You are right, the thing about whether or not we'll get a free download is the decider. Of course, the words, gate, horse and bolt spring to mind, since in the Linux world it seems that if somebody does something, and somebody else doesn't like the way they did it, somebody else gets right on down making a better/free/whatever needs to be changed version and everybody benifits! There's no way to be a Bill Gates in the Linux arena, i sincerely hope not anyway!
If they release their stuff under the open source GPL thing, then it makes no difference whether Lindows are any use. If they are, great! If not, well, wait a year and somebody will have come out with a much better version, maybe even them themselves.
The main thing about this is, i reckon many linux distributions will get their heads out of their bums and start including a bunch of serious Win to Lin migration tools. Tools which will enable you to keep ALL the proprietary M$ formats (.xls, .doc, .avi, .wma et c) and still read and edit them flawlessly within Linux. It can certainly be done i'm sure, but i think that will be the next push for making Linux acceptable to the mass consumer.
It's not about an idiot proof GUI, it's about whether you can do your word processing or spreadsheet, and then email the results to someone on a Windows system, or a Mac.
When full integration is complete, M$ will be truly out the window. Not before.