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Of course it would be a step backward for most Java developers, they're already using what works for them and what works for them probably isn't running on a Microsoft OS.
And of course there are going to be heavy costs related to switching. VB.NET is still very different from VB in many ways. C# is a new language. It would be almost as hard to go from Carbon to COCOA for MacOS X developers as it would be for Win32 developers to go to .NET. Totally new languages, totally new APIs.

The only problem with .NET is that Microsoft did not relinquish control of its patents to the W3C or some other organization as a show of good will to prove that they don't want to turn .NET into a trojan horse. What happens to the mono project 6 months to a 2 years from now when it is starting to get mature? How do they know that Microsoft won't exercise its IP "rights" and crush them through litigation and not the marketplace? Seriously, there are no benefits to using .NET right now if you aren't already stuck developing for Windows. IMO, .NET will probably just be a clean way to write Windows apps in such a way that the sophomore CS major intern code monkeys can understand. Not that that's a bad thing. That's still a major leap forward for Microsoft.

How do they know that Microsoft won't exercise its IP "rights" and crush them through litigation and not the marketplace?

You are right, the study didn't look at the costs of being under MS's thumb.

Maybe they should have.

How do they know that Microsoft won't exercise its IP "rights" and crush them through litigation and not the marketplace?

That's why I'm studying it like hell right now! ;-)