I've been running Ubuntu for a little over a year now. I've gone through two major upgrades, from 7.04 to 8.04 to 9.04; and all in all, it's worked.
7.04 had bad wireless problems; 8.04 was much better; and 9.04 is generally functional, though not up to Windows standards yet. Multiple display support has had similar sorts of issues; in the three versions of Ubuntu I've used it's gone from awful to OK. OpenOffice -- at least the word processor and spreadsheet portions -- is a useable replacement for Microsoft Office (to the point where it's now installed on all of our Windows machines as well, and we've uninstalled Microsoft Office and lost the install disks.) OpenOffice is much better than Office when you contrast it to the most recent version of Office, the ribbon bar complete interface revamp, which is an absolute abomination, new for the sake of new. (Digression: no, it's not really new for the sake of new, it's new for the same reason IBM introduced the microchannel bus architecture twenty years ago -- they saw the ISA interface getting away from them and they wanted to move everyone to something proprietary. It didn't work for them and the ribbon interface isn't going to work for Microsoft for the same reason.)
GIMP isn't Photoshop, but it's functional, and free, and you can tweak it to resemble Photoshop.
XNView isn't ACDSee -- it's probably better. (Certainly better than the recent versions. It's available for Windows, too. FastStone is a Windows only image viewer, but it's also free and better than recent versions of ACDsee.)
VLC is the only media player I bother with any more. It's almost infinitely better than anything Microsoft has ever shipped, and it's available on Linux and Windows (and a bunch of other platforms.) As recently as a year ago it had difficulty playing windows media files on Linux -- you had to hunt for libraries and install them manually -- but that's resolved. It plays .wmv files beautifully.
There's nothing quite up to iTunes standards on Linux, and I've tried them all in recent years. I finally settled on Rhythmbox, but it's a pale imitation.
There's no open source 3D software that's as good as my 8 year old copy of 3D Studio Max. Blender looks interesting but it's not a commercial grade tool. (There are a variety of commercial tools available for Linux, though, and in this area that's probably sufficient. 3D Studio Max isn't available on Linux, but Cinema 4D is, Massive is, Maya is ... while the situation is no better than that on Windows, it's not a lot worse, either.)
The Bash shell is certainly vastly better than the Windows CMD prompt, but not in the ballpark of Windows Powershell. (Howls of outrage from the Linux community -- I'm willing to be educated here. But Powershell is an absolutely remarkable piece of technology.)
At least in dealing with NTFS, rsync is much slower than XXCOPY, the freeware utility I use under Windows to synchronize filesystems.
There's no newsreader for Linux that's remotely comparable with Forte Agent.
Linux started out as an 80% solution -- nothing wrong with that, and in in-house software development you're better off living with the 80/20 principle: you may have time to code the 20% that your users absolutely require (and which provides the 80% of the functionality they'll actually use), but the chance that you'll ever have time and staff to code the remaining 80% is usually poor. But individual computing is about the 100% experience -- if one in five people can't use a given platform, or one in 5 apps that an individual wants to use are unavailable, that platform is never going to be viable.
Ubuntu, for my purposes, is a 90% solution at this point. The underlying OS, as of Ubuntu Version 9.04, is superior to Windows Vista and probably a wash with Windows 7. It has sound issues, driver issues, multi-monitor issues, and yes, still has wireless issues ... but they're all minor by comparison with where they were. On the upside, it has infinitely easier installation and upgrades, and there's nothing on Windows that compares to the ease of use of the Linux respositories. (Though if the Linux crowd would get their shit together and settle on a single installation model, the rising tide would lift all boats. The deb/rpm/whatever split is stupidly counterproductive.)
About half the computers in our house (plus the media server) run Linux at the moment; it would probably be all of them if I didn't work with Windows software for a living. The value proposition is hard to beat, particularly for older machines -- reinstalling Windows on a notebook that never came with the Windows disks, once it's crashed, is more trouble than it's worth: I can install Ubuntu off a usb key. (Technically you can do the same with Windows XP, if you want to spend more hours of your life than it's worth to build a custom install key, and you're highly technically literate. I spent about 12 hours recently doing this for a netbook -- no optical media available -- that crashed with several days unbacked-up work on it. It was worth the 12 hours to recover the 30 hours of work, but it was still deeply annoying.)
The value proposition is pretty straightforward:
Windows XP ~ $100 vs. Ubuntu 9.04 free. A wash on functionality. Winner Ubuntu.
Photoshop ~ $670 at Newegg vs GIMP free. Photoshop is better and if you need it you need it; but if you don't, GIMP is the choice. A wash except for pros.
Microsoft Office $360 at Newegg vs. OpenOffice free. Big win for the OpenSource camp.
The various little utilities are mostly free on both Windows and Linux today, so we'll call that a wash, except that I wish iTunes was available for Linux.
$1130 for the Microsoft stack; free for the Linux stack.
This is the home user, student argument; it gets more complex for business people. But at our house we're moving toward Linux, and away from Microsoft, and I don't expect that to reverse any time soon.
So Google is now pushing both the Android and Chrome OS. Most companies would be content to fail at a single OS at a time.