I've been running Vista for a little while now, despite having heard the various complaints about application incompatibility. Most applications I install on my machine have updated versions that are now Vista-ready, so I for one, have no complaints with it; I think it's a sharp looking OS (better than the cartoon appearance of XP), and there are a few new features that I think make using my PC a lot easier. I'm not yet ready to tout Vista as the new best thing, but it's doing pretty good so far.
Incidentally, XP will likely not be fully dead for another several years. I have read reports of Microsoft maintaing XP support up until 2014, along with Vista, and sometime in the future between now and then, Windows 7 - by 2009, Microsoft will likely be supporting three different platforms at once.
To not offer XP support would be an awful move for Microsoft, as they have only stopped issuing the OS on new machines sold at retailers. Considering that many business network structures have only recently begun to migrate to XP based server-client systems, to pull the rug out from under them now would be disastrous. I think that is where the true danger lies, more so than with people's personal home computers.