Smart Office News has a WSJ report about the real reasons for Longhorn's delay - it was fundamentally broken. I think I said something along those lines - here, for instance. Here's the punchline:

Allchin is co-head of the Platform Products and Services Division. "It's not going to work," he told Gates in the chairman's office mid-2004, the paper reports. "[Longhorn] is so complex its writers will never be able to make it run properly. "The reason: Microsoft engineers were building it just as they had always built software. Thousands of programmers each produced their own piece of computer code, to be stitched together into one sprawling program.But Longhorn/Vista was too complex: Microsoft needed to begin again, Allchin told Gates.Allchin's warning recognised a growing threat from Google, Apple Computer, makers of Linux and corporate buyers - the latter horrified about security problems. Allchin and a small team demanded a revolution in how Microsoft works.

It was only a matter of time before the "tightly couple everything to everything else" theory collapsed, and it sounds like it collapsed ugly. The thing is, the management shakeup - the one that ousted Allchin and put Ballmer's cronies in charge - is probably the last thing they need. If I read this article right, it sounds like Allchin played Cassandra, and got the same kind of treatment she got. The sales guys are in charge now, and architecture is the last thing they care about.

I predict rough sailing ahead for MS.