The debate 'overlapping vs tiling' is as old as window managers [1]... And novel interaction techniques have been explored in 2001, though we are far from the ideas presented in the second paper [2], check the video http://open-video.org/details.php?videoid=8280 ...

cheers.

[1] Myers, B. A. 1988. A Taxonomy of Window Manager User Interfaces. IEEE Comput. Graph. Appl. 8, 5 (Sep. 1988), 65-84. DOI= http://dx.doi.org/10.1109/38.7762
A taxonomy for the user-visible parts of window managers is presented. It is noted that there are actually very few significant differences, and the differences can be classified in a taxonomy with fairly limited branching. This taxonomy should be useful in evaluating various window managers, and it will also serve as a guide for the issues that need to be addressed by designers if future window-manager user interfaces. The advantages and disadvantages of the various options are presented.

[2] Beaudouin-Lafon, M. 2001. Novel interaction techniques for overlapping windows. In Proceedings of the 14th Annual ACM Symposium on User interface Software and Technology (Orlando, Florida, November 11 - 14, 2001). UIST '01. ACM, New York, NY, 153-154. DOI= http://doi.acm.org/10.1145/502348.502371
This note presents several techniques to improve window management with overlapping windows: tabbed windows, turning and peeling back windows, and snapping and zipping windows.
http://open-video.org/details.php?videoid=8280

disclaimer: I use a Mac, I've never used the Ribbon UI, and I'm an HCI professor. These two facts make me competent to talk about it.

In short: Microsoft (which I do not support usually) people has done a lot of work usability-wise (see the end of this msg): no it's not eye-candy.

It's ok for some people used to the old interface to complain: they have to learn new ways of interacting, it's costly, but the designer's bet is that it will pay off in terms of efficiency at the end. ALL interfaces need users to learn before (hopefully) becoming efficient. Changing for changing will only oblige users to forget what they've learnt. But changing for more efficiency is valuable, and that's what Ribbon designers claimed they have done, and it seems the processus they have used to design the thing is good. I think you can't blame them for that.

A link about the story of the Ribbon: http://blogs.msdn.com/jensenh/archive/2008/03/12/the-story-of-the-ribbon.aspx

In summary:

word 1: 50- menu items Word 2003: 250+ (not counting toolbars, small property windows etc)
something has to be done
design took five years

Designers have:
Visited people at their workplace
Visited people in their home
Invited people into our labs for freeform working and discussion
amassed over 10,000 hours of video of people using Office, Over 3 billion data sessions collected from Office users ~2 million sessions per day
Over the last 90 days, theyâ(TM)ve tracked 352 million command bar clicks in Word
tracked nearly 6000 individual data points

Analysis:
Which commands do people use most?
How are commands commonly sequenced together?
Which commands are accessed via toolbar, mouse, keyboard?
Where do people fail to find functionality theyâ(TM)re asking for(in newsgroups, support calls,etc.)?

They also iterate a lot to find new solutions, and they evaluate the solutions until they were satisfying.