FireFox is the app of the decade - it truly is the new 'killer app' for the 00s. While the tabbed features are great, they're not necessarily difficult to imitate - look for IE to provide the same feature soon.
FireFox's 'IE killer' qualties are its security and control features. I'm now paranoid to even open up IE to test one of my Web sites. It's a beautiful thing to run virus scan, Spybot, AdWare, et al and not get a single hit. Use IE for 10 minutes and look out!
IE is ultimately doomed by its original design and incorporation of MS active elements. If MS were to completely re-design IE to respond to FF, then it wouldn't even be IE any more - MS would have to eleminate every internal/back-end link.
Microsoft will probably buy Firefox, and rename it. I believe that's how they got IE. MS has never been an innovator in anything with the exception of Word Processing software maybe.
I think Windows itself was ripped off from somewhere. Internet Explorer was purchased, and they renamed it. They also discourage growth in new innovations. When a company announces they are going to develop a type of software, Microsoft soon after, announces they are going to work on the same thing. Immediately the smaller company stops development because they can't compete with MS, then MS simply sits on the project.