Currently there is no viable option for the typical PC user besides Windows. Linux is still not ready for prime time. It is great for people who know excatly what they are doing but the average user would find the learning curve daunting. Windows is as aeasy as turn on the computer and use it. Linux requires more end user input to use simple things like a CDROM. Of course OS X is only available on a Mac (who can use Windows also btw) so PC users are stucks until someone develops a more user friendly Linux.
You are right on point.
I wouldn't be surprised if they were going to soak up all the money from the impending Vista release, then announce that they are cutting Windows loose.
"We are spinning off our Windows subsidiary."
At this moment, maybe. Windows is still a HUGE piece of their revenue pie. But going forward Office and SQL Server have some serious headwinds from online alternatives. Google has already released online word processor and spreadsheet apps and open source SQL engines are gaining ground also.
The OS gets sold with almost every PC today and at the prices they are getting for Vista, it remains vitally important. As the online apps gain more share, the days of office suites and such are drawing to a close.
MS has already ported Office to the Mac (under OS X - Office v.X, Office 2004), as well as an Outlook equivalent called Entourage. By doing so, they've *also* done most of the work to port it to Linux.