I'm scared. And that's saying a lot.

I've heard of Microsoft coming up with crazy ideas like this before. There are four major problems with it: 1) Consumers will finally revolt in earnest, and the amount of bad press will be beyond staggering before the beta even gets its feet wet. Hardly anyone will upgrade, resulting in major losses. 2) DRM is dying, slowly but surely, as its biggest proponents back off from it. As consumer outrage grows it may even face legal challenges. 3) Speaking of legal challenges, remember the antitrust suit against Microsoft that never went anywhere? This time it'll be a cakewalk for the FTC. 4) Microsoft likely isn't actually capable of this level of separation of services. They'd have to create a whole new OS from the ground up, that older Windows programs wouldn't run on very well. This would slow down software using the current APIs by requiring it to work through an interface layer (most likely) that called the new services, and DRM would slow the whole thing down even more. Microprocessor technology has not kept up in a way that would make this feasible.

All that said, I don't doubt Microsoft is pigheaded enough to try to go forward with this, but I don't think the worst will come to pass. A bit of consider-the-source comes into play here: This is FUD from Linux users who inherently distrust Windows in the first place. Already Vista is being panned pretty severely by Windows users anyway, and that's bound to throw a monkey wrench into the new plan as it is.