It wasn't because they couldn't figure out issues with .NET in Longhorn. In-fact the early .NET Kernel Beta's ran bloody awesome.
This all actually comes down to something far more simple, and business-wise can extremely expose Microsoft's weakness to competitors.
They didn't want to break compatibility.
Alright you can argue that non of the previous Windows platforms have exactly provided 'perfect' compatibility and I don't doubt that Vista will be no exception.
Yet there is a difference between, providing 99% Backward Compatibility and forcing the development community to choose between the tried and tested Windows XP-Series or Windows Vista.
Don't get thier move wrong. They still support .NET in the exact same way as they support many other attributes of previous Windows platforms. So .NET will run natively in Vista, the difference is simply it'll still be running seperate from the Kernel not as part of it. They've also not taken this as an oppertunity to remain purely on the X86. Vista was designed to finally be a worthy replacement to Windows NT 3.5 and that's exactly what Microsoft plan to provide.
So being able to use it on your SPARC, X86, PPC, and ARM-Based Computers will still be possible.
Microsoft (as do the Linux Community) believe that .NET just isn't technologically ready for implimentation and acceptance yet. The estimate put-forward is 2010 will be when Microsoft believe enough business' will have moved to .NET for it to become a financially sound decision to drop Win32 native-support.
So in terms of what Vista means on the evolutionary scale, then really what your looking at is exactly what Valve did for Half-Life 2.
Source is deep down identical to Half-Life, with some new gadgets, gizmos and alike. While Half-Life can be patched for physics and such, Source is doing it all natively now. So much quicker, much more stable, lessons in secure have been learnt and developed at the lowest levels rather than patched as they're discovered.
So in terms of what is possible, we're not looking at a huge leap technically speaking.
Visually, yes it is far more stunning. Many Linux users will be happy to see the level of customisation made possible with Avalon (AXML) for the User Interface, and also being able to have some quite visually stunning abilities will also be something to look forward to.
Multiple Desktops, Fully Customisable Sidebar, Scriptable Transparency, Scriptable Layouts, DirectX Integration, etc.
Desktop Theme/Style developers are just going to be like children in a candy store. One of the Beta Styles, was called 'GameCube' showing what was possible. With a single Avalon Script it was possible to change the entire desktop to run just like the GameCube 3D Menu System.
So there is definately some major room for flexibility and personalisation now.
The visual side of things isn't the only thing that has changed either. All of the memory is now handled by .NET, utilising Garbage Collection. Generally before Windows XP wasn't actually that poor with the memory itself, only some old application designs were. For example Explorer just would horde memory like a Jack Russel even after being released. Vista is now able to make sure that anything an application uses is deleted when it's not in use.
When you combine this with libraries that use between 3/4, or 1/2 the memory they previously did. Not to mention the speed increases on general operations due to cleaner code running less independant error checks. Then you can imagine that using the exact same settings as Windows XP and you computer will run quite noticebly faster with less available.
There is a Microsoft Games Studio MMORPG in development that will run as your desktop background without really adversely affecting your desktop speed. Such things are now possible with true multi-threading with the libraries rather than the previous stack method to emulate threading. You'll notice it most on the new Multi-Core Processors.
I believe Microsoft are finally on the right track with thier Operating System. While no doubt both Linux and Windows communities will continue to bash each other for sometime to come, the new design of Vista is going to seriously close the gap and shed the old addage of Unstable Windows.
Vista really does stand as a touch of innovation in the way of allowing the user so much access over how to use and utilise his/her system while at the same time making sure they don't have to worry about any of the complicated background stuff.
Some key element have obviously been learnt not only from thier past platforms, but also from thier recent work with some Unix solutions for external companies. I also believe they've learnt something about Media Interaction from Media Center and X-Box Live!
X-Box Dashboard is really showing that this is the case also.
So I think although it isn't quite the Evolutionary step we had hoped for. It should become the missing-link that allows Microsoft to finally break free of the aging 16/32bit formats.
