Vista (or lack of)
Prediction: Windows Vista will never be released…well it will never be released in its current bloated form.
Instead, I think Microsoft will finally realize that it is ok to break backwards compatibility…at least in some situations. Furthermore, I think they will actually see the deep threat posed by Google and will respond with a preemptive strike on building next generation services (and no, I am not talking about the crap that is currently called Windows Live).
What I think they should really be focusing on is a slim and speedy version of Vista which truly embraces the WebOS programming model where additional functionality and services are offered through an internet connection. Of course, there will always be a need for some offline applications, but with the growing ubiquity of (high-speed) internet access, the old thick-client model is outdated. Instead, people want the ability to access and manipulate their data from a number of locations, devices, etc. Microsoft has the talent to implemement this futuristic vision, if only they would break of packaged software mindset.