If you're a secretary or data-entry clerk, maybe. But for most jobs, no.

Let's look at what I'm running right now that isnt in the browser that is necessary:

Outlook (email & calendar)(no, gmail is not even remotely adequate for this)
Pidgin (IM)
Notepad++ that keeps my content when the laptop is in standby and offline
OneNote
Putty
Thunderbird (for IMAP email accounts)
Ruby IDE
Eclipse
MySQL Admin tools
PasswordSafe
MozyPro offsite auto-backup
MediaPlayer
Paint.NET
SVN client
FileZilla
Lightscribe disc labeller
Jing

Thats just a quicky list.

Mind you, most of those run on Linux or have something roughly equivalent that does. The problems that are hard to replace are Outlook (Evolution is a POS in my experience), OneNote (nothing like this out there in the OSS world that I am aware of), and Jing. Although there may be something like Jing out there I'm not aware of.

To answer your question, since nobody else seemed to:

AutomaticUpdates doesnt use IE directly, and is not dependent on having a specific version of IE on the system.

It's probable that AutomaticUpdates and IE share some underlying componenents like WinInet and similar things, but thats not quite what you're asking, I dont think.

WindowsUpdate and MicrosoftUpdate, which you do through the browser on XP, will work on any supported version of IE.

You realize that you control whether PDF's open in the browser or not.

For the vast majority of people, there's no reason to have it open within the browser.

Just go into the preferences of Adobe Reader (or whtever you're using) and set it to not open within the browser.

That assumes you actually have a digg account, or are willing to create one (which isnt necessary to use the site), and login.

Even then, there were so many javascript bugs in the login screen, in the diggbar disable button, etc, that it was problematic for anyone not using the current version of Firefox.

Which is sad, because although I use FF for all my webdev, and work stuff, I dont actually use it for any personal/fun reading, its too clunky and requires too many plugins to be useful.

Unfortunately, that means I use Opera, but boy oh boy does Digg have lots of problems with Opera, if you want to use any of their stuff buried behind a login (which I never have before).

I find the DiggBar to be one of the most abominable things I've seen on the web since the 90's (and MySpace, of course).

Who actually reads the comments or actually uses any of the features at Digg? I've never actually met anyone who does that, but I guess if you do, the DiggBar might be slightly useful.

My biggest complaint is that they used a whole bunch of 'stuff is broken' to make the diggbar almost impossible to remove if you're using Opera.

The little drop-down button to make it go away permanently didnt exist.

You had to create an account and always be logged in to disable the diggbar, but you couldnt login with opera, because they had to be tricky and do an all javascript lightbox login page, which of course didnt work under Opera.

Plus it put that horrible digg icon on all the tabs you open with it, and obscures the actual URL of the content. So when I go through and open 20 or 30 tabs of stuff to read from digg, now they all look identical in my tabs. Just horrible.

And what's the big deal about short URL's? Is there any piece of modern software (except idiotic twitter) that cant handle URL's of arbitrary lengths?

Flash movies zoom in and out just fine, at least on IE7, FF3, and Opera 9.

I too run 1920x1080 on a small laptop screen and have most everything zoomed constantly.

Critical improvements of Vista/Win7 over XP:

1. UAC. You may not be a fan, but its light years better than doing everything win RunAs and DropMyRights and MakeMeAdmin on XP.

2. Composited desktop display. No more tearing, no more desktop getting locked because of network issues, etc

3. Sandboxed IE.

4. Dramatically improved IO Scheduler, which doesnt bog down the whole machine as much when under very heavy disk load (desktops, laptops, with slow drive subsystems).

5. Search-type launcher in the start menu. Rather than navigating 1000 menus, you just type the name of what you want to launch and hit return. It 'just works'.

6. Bidirectional firewall.

7. Integrity levels. Lower integrity processes cannot communite with higher integrity processes.

8. Massively improved AutoRun administration interface.

9. Requirement for the OEM/IHV ecosystem to provide x64 drivers if they want the label.

Thats just a quick 3-minute sample off the top of my head, and I came up with 9.

It's quite easy to run windows in that kind of a mode, it just doesnt ship that way.

Run as non-admin, turn off UAC, dont use IE7 or lower.

AutoUpdates are on by default.

Thats all you have to do. You'll never have to think about it again, everything will just work, and you wont have to know or care what a sketchy site is.

The challenge isnt MS (or any company with the volume of XBL) having enough capacity at any one time, its in how fast they can grow their capacity.

Look at last christmas, when they couldnt keep up in capacity growth when CoD4 came out and everyone was home playing on the holidays.

That was just them hosting the login servers.

Imagine how bad it would have been if they not only hosted the login & matchmaking servers, but had to host reflectors/multicasters to host 2-12x the amount of traffic of every xbox player in the world (or region).

No, it doesnt have anything to do with the 'theme'. But it does have everything to do with Aero, which in addition to the surface level 'pretty' stuff, is (finally) a real compositing window manager for Windows.

Thats the primary reason for all those improvements I'm talking about.

If you disable Aero, and go back to the standard non-compositing desktop, you're back in the same tech as XP, with its problems that I noted were fixed/improved.

If you paid for Vista w/ downgrade but did not receive BOTH sets of CD's, then you got screwed, and you should take it up with Lenovo.

We buy our laptops from HP (Compaq's, not the consumer crap), and when we do that we get the following media with the laptops:

Vista Business x86
Vista Business x64
Vista 32-bit and 64-bit drivers
XP Pro
XP pro drivers

With regard to your partition-only problem, use one of the million of free drive imaging systems to pull it off, and pull that into your VM. It means you'll never be able to install fresh, but there's no reason you cant use your XP install in a VM.

And which exact security features did they remove?

And you can go back to the old taskbar if you want.

And which exact DRM is that? And what precisely did it stop you from doing on your beta win7 machine that you wanted to, but couldnt because of DRM?

Can you describe which 'DRM features' Vista had that were 'privacy violating'?

The problem is that you and the other 6 people that want that arent a big enough market to be worthwhile to companies like Best Buy.

Part your own via newegg, or buy from a smaller whitebox dealer.

What law are you implying that they broke by only allowing XP downgrades on their business or full price versions?

There's nothing to be revealed, its as simple as simple can be.

Microsoft has chosen to stop selling XP.

Microsoft has chosen to given downgrade rights for business customers as a courtesy to them. Since it was only intended to address the business market, it is only available on full price business or better versions of the software.

Microsoft has chosen to not offer downgrade rights to the home/consumer users. If they want downgrade, they need to buy the business class products.

Given that MS owns and created XP, and is under no obligation to keep making it available AT ALL to anyone, if they choose to, its on their terms. You always have the choice to not buy it.