I recently read a story that asked, "Has the Desktop Linux Bubble Burst?" Burst!? No, I dont think so. Actually, it still isnt even half as big as it will be when its full.
The author goes on to explain that he feels this way because GNOME "lacks any form of a vision," while KDE4 is full of wonderful ideas, but not enough money and effort behind turning concepts into code.
I dont see that at all. I think both popular Linux desktop environments are making good progress.