I have not encountered a single incompatible application.

He has a point though. Most people doing gui apps are still on 2.0, because it will already be on every xp machine. I guess "vista" applications are going to be when people start standardizing on 3.0.

The jump from Winforms to WPF is considerably larger as WPF is nothing like Winforms. Not only is WPF considerably different from Winforms, there is the issue of support to consider. How long is Microsoft going to support WPF? Winforms was introduced in 2002 with .NET 1.0 and it was deprecated 4 years later. Not even Apple does that to their APIs! Compare that with MFC/Win32/ATL/WTL which has been fairly stable for the last two decades. Any sane project manager is going to take the wait and see approach with WPF to see how things develop. Will WPF be the new MFC? Or will it be deprecated in 2010 in favor of whatever new and cool stuff Windows 7 is going to bring?

Then you have the performance issue. Many applications cannot afford the runtime performance penalty that the .NET framework incurs. Sure, it works for in-house applications, the niche that VB 6 filled but it's just not suitable for most client side software that home users run. If given the choice between a .NET managed app and an unmanaged native app, you can bet users will flock to the unmanaged native app. See Beagle -> Tracker for an example.

Vista keeps giving wierd errors about the PHP executable not terminating correctly (every second or two!). In addition, many of my applications require (or strongly recommend) that I install them in a folder besides "Program Files", which has extra OS protection. If seems wierd to go back to the Win 3.1 days of c:\MyApp. Of course, many will lay the blame for that on the ISV's. As an end user, that makes me feel all warm inside, NOT!

Funny thing, I have to support an old PHP app I inherited, and i have no issues running PHP under fastcgi with IIS7 ;-)

Such large changes in APIs are never a good thing as it takes a very very long time for applications to be rewritten. Consider the move that the KDE project made from Qt 3 to Qt 4. Qt 4 made quite a few changes to the Qt library that made it incompatible with Qt 3. Nevertheless, a tool was made available to automatically port Qt 3 code to Qt 4. Even so, it still took 3 years for KDE to make the move to Qt 4, Qt 4 first appeared in June 2005 and KDE 4 appeared in January 2008 (ignoring betas, RCs, etc for both projects).

I run 2k8 enterprise on my development machine (got it for free at the launch event). Haven't tried on vista, but it should be the same kernel, and IIS is mostly the same (differences shouldn't really effect ISAPI stuff)

Most people doing gui apps are still on 2.0, because it will already be on every xp machine.

If you are somehow on top of technology and have some ability as a technical professional pushing .NET apps is just silly...For custom business applications the way to go is web based, using AJAX and dynamic HTML...