Really it doesn't look like a huge step forward. I don't care if the desktop runs in my browser vs my actual PC. Desktop environments continue to suffer from a lot of problems.
First, I really need some way to declutter and organize open apps around my personal real-world "logical" tasks. Desktop environments all display a single, poorly organized static list of apps. I feel like I have lost my mind half the time during a busy work day. I often get a feeling synonymous with the "why did I come into this room!?!" feeling when I can't keep track of where I am in the desktop environment, or why a given app is even open.
Attempts have been made to address this by grouping items by application. For example, in Windows, grouping all the Microsoft Word content in one group on the taskbar. The thing is, I need things on the task to actually correspond to my real world tasks. Granted, I don't expect the UI to read my mind, but if there was some really slick way to group multiple instances of different apps together and identify them with one task, that would be awesome.
Another problem with desktop environments is their performance. They continue to attempt to push the limits of what hardware can do. Often, they go to far. As Jeff points out, for a developer, I want my tools to work fast. I can't stand waiting for some GUI widget to load so I can code, or for that matter browse the web or write an email. This, in my opinion, is why straight up command line development continues to thrive and why many of us don't want to give up Windows XP for Vista.
If Vista can't get this right, performance is not going to be improved by having a "web desktop".