Microsoft has a history of rising up to destroy the browser competition that exists at the time. They also seems to rest on their laurels afterwards in a manner that stagnates web innovation.
This time though, there are a few viable competitors
and the Windows platform, while still dominating
, has dwindled since the last browser war. So I think healthy competition will hopefully remain in place this round. Nonetheless, Microsoft should not be underestimated - they now see the value of controlling the Web via a dominant browser, and they also have Windows 7 on the horizon, which may or may not increase their OS market share. You can bet on IE8 being a prominent feature in Windows 7 and pushed to existing Windows users.
I wish the underdogs luck!