Windows 7 won't kill Linux on the desktop or anywhere else for that matter. Linux is a brilliant OS for everything its good at (low fragmentation, excellent memory handling, brilliant server reliability), I've always had a copy of Linux installed on my laptop - Fedora,Ubuntu,CentOS. I have also played with Mac OS X, All the major OS players have there pros and cons (for example Mac OS X - you have to by mac hardware)
One of windows' major con - reliability. I constantly see laptops filled with adware/spyware, with fragmentation levels through the roof.
Trying to get a workable system out of these laptops (without formatting) is a tough and lengthy challenge, So I tend to do what everyone does with windows... format it and start again.
Windows 7 has been a completely different story - I only restart my laptop when I get a windows update (and even then - most don't require restarts).
I'm running the RC version on an Intel dual core laptop with 1.5Gb RAM.
This has always been an issue in windows, it always uses too much RAM (especially vista) however in Windows 7 I can run firefox 3.5, ie8, Textpad, Google Chrome, Safari, Photoshop CS3, SecureCRT, Skype and msn all at the same time and only use 1.3Gb of my 1.5GB available RAM.
This is a huge performance increase against vista (and xp) as i'm also running the "aero" theme with transparent windows bars, etc.
Comparing to Linux on which you would need to install your GUI (Gnome/KDE) and then install Compiz or other 3D renderer for your GUI type. Although this does allow you more customisation it also takes longer and requires some linux knowledge to do (so beginers may stuggle if they have non-standard hardware)
Things Actually Work
After I had installed Windows 7 99% of things worked, the only things that didn't work were: my memory card readers, and fingerprint sensor. I've never used the memory card readers so I wasn't bothered really, and the fingerprint sensor was fixed with this.
I've always found with Linux after an install their are always things that need fixing - normally the wireless first (which can become tricky if you have no network leads - or your ethernet doesn't work). I was pleasantly suprised when everything just worked in windows 7
Windows 7 is a great improvement on Vista and XP, but Linux has it's own place especially in the reliability department which helps on the server side. Windows is getting better, Linux is getting better. They are like cars, loads of different versions but all do the same job.