I can't help but wonder how much of Vista could actually have been installed via the Internet in a true "Software-as-a-Service" (SaaS) fashion via Microsoft's auto-update mechanism.
Microsoft's Windows releases have historically been built around the big bang event, but there are signs this model no longer works. Future windows releases will almost certainly be "dripped" onto PCs as the base PC infrastructure has become an un-differentiated commodity.
Consumers no longer see value in a new operating system. They want applications and features. Not like in 1995 when I eagerly waited for stellar new Windows 95 features like "Preemptive Multi-tasking!!" and "386 Protected Mode!!".
In my mind, high-quality automatic updates are a "service" that I would be willing to pay for on a monthly basis. It's funny that I would take pause to purchase Vista at $299, but would probably gladly pay $10 per month to incrementally receive new features, patches, and updates over the Internet (assuming OneCare Live was bundled).
The Windows auto-update capability should not be underestimated. It is a very strategic asset in an Internet enabled world. Microsoft is already using it as leverage to convert pirated PCs to genuine licenses ("Don't like that virus on your machine? Redeem yourself for only $49 and we'll wash away the pain!").
The bottom line? I'll get Vista with my new PCs when I buy them from Dell, but it's doubtful I'll upgrade any existing PCs.