This whole Visa/Office 2007 upgrade thing has me thinking a lot about Apple in the mid-1990s: Machines priced higher than their competition and so many different versions that making a choice was almost paralytic. There's like what, six versions of Vista and Office 2007 each?
Ballmer can blame piracy all he wants, but the truth is the M$ is offering too little compatibility with too few real new features, for too much, with too many choices for the average consumer to understand.
And, then there's that other issue of having even a Pentium 4HT grind to a halt trying to run Vista (if XP was a resource hog, you ain't seen nothin' yet). Someone said above that M$ has got the PC makers on a short leash b/c that's where every new copy if Vista is being installed - I totally agree with this. I also think that the whole Office 2007 file incompatibility issue is going to come back and bite M$ as well - sure, you can "save as" a previous version of Office document, but somehow I don't think everyone is going to be thinking of this when they're sending out memos from their shiny new Intel quad-core PCs. Has anyone received an Office 2007 document and tried to open it with Office 2004 on a Mac or 2003, 2002, or 2000 on a PC? It's not pretty.
M$ is forcing a major software upgrade on folks, and charging dearly for it. This is classic behavior of a monopolized industry. Heck, even Apple had the good sense to build in "Classic" and "Rosetta" into its OS X versions for PPC and Intel. And while M$ claims that Vista will run almost any 2000 or XP program, reports from the field beg to differ - this wasn't nearly as big an issue as the transition from 2000 to XP.
I'm guessing consumers are hearing more about the initial wave of backlash against Vista and it's giving them pause for concern - especially if they don't have deep pockets to upgrade their hardware and Office.