Honestly, I think that while they've put a lot of money and time into securing Vista, the fact that you have a prompt for most of it will annoy people to the point where they won't want to upgrade. As well, many countries are moving to a purely Open Source (and free) solution. Not only are they using Linux within the government, but they're developing their own flavors for citizen use.
As well, there are so many free alternatives out there to Microsoft's products, that most of your average user base are starting to see them, try them, and stick with them (hey, they're free, why wouldn't they?). I think Microsoft will start to lose some of its market share, and indeed actually feel the blow of the Open Source movement. I think they can already feel it coming though, as they have partnered up with Novell.
Though I still don't think Microsoft will really topple for some time, I believe they are starting to slowly decay.