[citation][nom]crom[/nom]Microsoft would do good to take yet another page from Apple. They should rewrite a brand new OS, from the ground up, and use that as their next release. From there they can have much more control on how secure it is, etc. Next, write an emulator to run old windows kernel software in "legacy mode". That way you don't have to worry about incompatibility, and you will also have time to bring legacy users over to the new system. [/citation]
Since they're so far into this build though, doing something that drastic would be tough. I think it's best to not think of Windows 7 as a new OS, but as a significant upgrade (like the change from Tiger to Leopard with OSX). It looks like Microsoft is just trying to push out something with a fresh label to make buyers give it a less biased chance. Scrapping Vista altogether would be a big waste of time and resources for Microsoft. The fact is, most people don't keep up with technology and rebranding Vista as Windows 7 is probably all Microsoft needs to get more life out of the OS.
Look at Intel and their whole Pentium 4 fiasco. The Pentium 4 did well for years, even though it was inferior to the Pentium 3. Most people saw that it was a newer processor, and that was all that they needed to justify the buy. If they knew how awful the Netburst architecture really was, they probably would have looked elsewhere. All Microsoft really needs is something to succeed Vista without the Vista label. Wait a couple years for hardware advancements, throw in a few new features, optimize the OS a bit, and viola!