No soup for you!
There are a few very important aspects to this whole pricing issue that many seem to overlook. The most important one is that the 29 USD will get you an upgrade copy. Not a full version. If Apple's past behaviour with its Up-to-Date program is anything to go by, this means that you will need Leopard installed before you can install your copy of Snow Leopard, and that if you want to perform a clean install, you'll need to install Leopard first, and Snow Leopard second.
In addition, Apple still hasn't made anything known about a possible full retail version of Snow Leopard, and its possible price tag. This is an issue for users for Mac OS X Tiger, since they will not be able to buy Snow Leopard for 29 USD; instead, Apple suggests Tiger users buy a box set which includes iWork and iLife, which comes in at 169 USD.
While this 169 gives you some good value for your money, this price is actually not lowered at all - previous box sets, with Leopard and Tiger as the operating system, also went for 169 USD. This means that Tiger users will not benefit at all from the 29 USD price tag for Leopard. On top of that, what if you don't want or need newer versions of iLife and iWork? What if you already have them? What if you don't care about them at all? Apple is punishing Tiger users for not having upgraded to Leopard.
On the Windows 7 side, things look much, much brighter. Windows XP users are also eligible for the Windows 7 upgrade sets, so that people who bought their operating system in 2001 (!) are still eligible for the upgrade; that means 8 years of Windows purchases covered, versus only 2 (!) years of Mac OS X purchases covered.
Then there's the issue of hardware cut-off points. Both Snow Leopard and Windows 7 went on a diet compared to their predecessors, and will see performance improvements on the same hardware. However, Windows 7 has a major advantage in that it can run on hardware that's even as old as 7 years - my Pentium 4 2.8Ghz with 2GB of RAM from 2002 does its job as a Windows 7 media centre outstandingly, inlcudig instant sleep/hibernate/wake cycles,
full HD playback, and all the bells and whistles.
Snow Leopard, on the other hand, will only run on Intel Macs, meaning that high-end machines still sold in August 2006 (PowerMac G5), with pretty hefty price tags, are now left in the cold. In other words, it is much more likely that Windows users will be able to run Windows 7 without having to invest in new hardware than Mac users do with Snow Leopard.
On top of all this comes the fact that the 29 USD price for Snow Leopard doesn't even compete with Windows 7's prices. As said, the 29 USD is for Leopard owners only, meaning that the price is utterly irrelevant when talking about switchers; they simply don't benefit one bit from this pricing.
All in all, the 29 USD price is nothing but a (very welcome) gift to loyal Apple users who diligently emptied their wallets every time Apple asked them to, while the Windows 7 upgrade prices benefit even the most non-loyal Microsoft customers, even those who punished Microsoft for the abysmal Vista fiasco by, well, not buying into Vista. Seen in this light, Microsoft's upgrade prices - which are still not confirmed, but will probably be round and about 50-70 for Windows 7 Home Premium, and 100-120 for Professional, seem a lot more useful to a lot more people.
Which is the better upgrade?
This is a really intriguing question. Which of the two operating system upgrades provide more value for your money? The problem with this one is that it includes a comparison to their predecessors, making it a little bit more complicated.
Snow Leopard is truly a release where the under-the-hood stuff is more important than user-visible changes. OpenCL, Grand Central, removal of PowerPC code, fully 64bit, they all aid in making Snow Leopard faster and leaner. There are also some interface tweaks, but they are small (but useful!), and certinaly don't draw that much attention.
Windows 7 is a completely different story. Microsoft has made the operating system perform better than Windows Vista (and every report confirms that), with some even claiming performance on par with Windows XP, especially on more recent hardware. It could very well be that Snow Leopard gives a more substantial improvement in this area, but Snow Leopard has it easy; only very recent and powerful 64bit machines will see this benefit. Windows 7's (possibly) more modest performance gains over Vista will benefit machines that are much older and/or much less powerful. For instance, both that old Pentium 4 box as well as my low-spec Acer Aspire One perform better with Windows 7 than with Vista. Similarly aged and/or specced Macs can't even run Snow Leopard at all!
However, where the difference really becomes obvious is the interface changes Windows 7 introduces, and all the pulling-together of frameworks and features introduced with Windows Vista, and exposing them to users in much more useful ways than Vista did. The best example of this is Homegroup, which pulls together various technologies and features introduced with Windows Vista, and presents them in a way that makes managing your network and shared files (especially in combination with the Libraries feature) completely painless. Another example is that various driver upgrades no longer require a restart, such as graphics drivers.
The interface of Windows itself has also been massively cleaned up compared to Vista. It really takes some intensive usage to reveal just how much of the interface has been cleaned up, made more consistent, and overall prettified without losing functionality. My personal favourite is Windows 7's Explorer file manager, which is such joy to use now, while the Vista one was a busy and clumsy mess. Of course, there are still trouble spots, such as the overly crowded Control Panel.
Snow Leopard simply doesn't bring these kinds of massive interface improvements.
Overall though, while Snow Leopard certainly is a nicely priced upgrade to Leopard, and I'm sure going to buy the Family Pack to upgrade my parents' iMac and my own Mac, it just doesn't compare very favouribly to Windows 7 as an upgrade, in a multitude of aspects: supported machines, previous releases still eligible, and the number of people who are actually able to benefit from the upgrade. On top of that, I believe Windows 7 is a far more substantial upgrade than Snow Leopard, but I'm sure many will disagree with me on that specific one.