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First: Notice that the colorful icons are not KDE's. Look at KDE's icons in the same screenshot (Dolphin, Kontact, Applications, Computer, even OpenOffice, as well as everything inside Konqueror's MyComputer view). Look at the pale gray entry titles in My Computer, the seamlessness between window title, menu and toolbar, the window control buttons. The status bar does not look like that by default: it shares the pale gray theme.
Believe me, if you scratch further, you will get treated to yet more of the same. The application installer is an example.
I'm not using it right now, so I cannot recall exactly, but I found the panel dreadfully organized, and did not find the shifting panels that may turn into full-fledged windows with more shifting functionality to be a good idea at all.
And "Just typing the name" is what you did in MS/DOS, but then you only had, like, four apps in your PC. In KDE, the names certainly Karacter (sorry!), but there are a lot of them to remember, the names themselves are often less than helpful and, to me, they feel a bit ridiculous. Do I have to remember Akonadi, or Nepomuk, or Krita, or Amarok?
No, no, no. I do believe usability is low. I hope they understand and work to improve it, because the technology is very good.
You only have to type "music", or "web", or "mail" and the right entries will come up. No need to type in some obscure name unless you really want to. (And Akonadi/Nepomuk aren't even programs, they're servers/APIs that only devs should worry about. Which makes me think that you're specifically trying to come up with the weirdest sounding names that you can here, even though you don't use them. Try Palapeli.)
I think that screenshot posted was an older version, maybe KDE4.1. (EDIT: Doh! It's right there in the screenshot, version 4.0.2, so very very old. The giveaway was the fact that the entry in the taskbar didn't even have the icon set correctly. Lots of bugs back then.) The newer theme is similar in a lot of ways but definitely different. It does tend to have a somewhat pale theme - but then everyone criticized them for looking too toylike when they used bright colors. I like the photo-realistic style of the icons, which follows what MS and Apple are both doing. The Oxygen widget theme can be a little too low contrast, I think, but it's being improved over time. Edited 2009-11-13 08:12 UTC