I enjoy Linux (Fedora, SuSE and Mandrake primarily), but it's definately not ready for your average home user yet. The system will definately have to be simplified a bit on the UI end before the typical family will be comfortable with it. Gnome and KDE are starting to look real nice now, but the UI's are still geared to hackers (in the traditional sense), geeks, and power-users.
Software and hardware installation processes really need to be unified and cleaned up a bit as well. Having worked in tech support, there are enough people out there that get confused by the InstallShield wizards on Windows that you're just not going to be able to get them recompiling or editing scripts for installations, no matter how powerful the new way is.
If everyone in the world had the hacker ethic, then Linux would be a perfect solution, but most people really don't want to know how everything works, they just want it to be taken care of for them.
Given another couple of years and some real effort at addressing these issues, I'm sure that Linux will be in a more suitable position to compete in the desktop market.
I doubt that this is true, and here's why. There is no one in the Linux space with the economic incentive to get it up to par and keep it on a par with Windows and Apple OS. Making an OS both flexible and easy to use is a very expensive undertaking. Keeping it integrated with leading edge technologies such as speech and handwriting recognition is even more expensive.
Open source efforts such as Linux work well to replicate technology that is already well understood. But by it's nature, open source is not good at innovation. That implies that commercial operating systems will probably keep their lead on Linux for implementation of new technologies such as speech and handwriting, not to mention better integration of new peripherals.
Couple that with the fact that the people who gain the most from open source are highly technical types, and are not representative of the user community. That means there is no appreciation of the things the typical, non-technical user wants, or even the understanding of what that non-technical user needs. How are such people ever going to produce software that appeals to the non-technical user?
I'm happy to see Linux (and Apple) doing well in certain segments. Microsoft does much better when they have competition. They tend to get sloppy when they don't (which is why Internet Explorer stagnated so long). But that needs to be tempered with a realistic understanding of the strengths and weaknesses of open source.