There are compelling reasons to use Linux on a consumer PC but for many using Linux alone won't be a complete solution for the near term because of a need to run specific software not available for Linux.
That being said, most households have multiple PC's and laptops both new and old. However it is often the case that only one PC in the household really needs Windows for legacy applications while the other PC's could easily run Linux. The new release of Ubuntu is a superb platform for Internet access, web based apps and general purpose use.
Will I buy Windows 7 when it comes out? Sure, but it will be done selectively but not for every PC purchase. The time has finally arrived where buying a new PC with no OS installed, or Linux pre-installed is a viable substitute. It no longer makes sense for people to spend several hundred dollars each to equip every home PC with a feature-rich OS when cost effective solutions like today's Linux exist.
Note, this is not an anti-Microsoft view, its simply a practical approach which is important today.
As the number of Linux installations increase it will bring the involvement of application developers that have lived largely in Windows world. Some of these applications may be free, others will be fee-based but what seems to be occuring is a long term trend and the early stage of a fundamental change in the industry.