I don't really see it that way. Are Vista's new features enough to entice you to upgrade? Well, depends. I agree that there isn't a pressing need in stability and/or functionality which was present in many of the previous upgrade cycles. It honestly is more of an background upgrade.
As far as cutting off support, XP Pro is good for support until 2011 (10 years after the original release!) and possibly longer. While Home officialy isn't supported that long, its likely that Microsoft will quietly keep giving extensions since the difference between the versions is minor. That is much more support then other consumer grade OSes get (ie OSX and Linux). XP will also not implode the day after the support period ends. The only real possible must-upgrade factor is new hardware after a while (we are talking about 2010+ here, in all likelyhood), which is quite understandable.
Also, there is the fact that most people get a new OS with their new computer rather then upgrading. After Vista is released, XP will no longer be available to OEMs, so its unlikely many (nontech who don't know of the alternatives) people will be left with an unsupported system.
Honestly, I don't see why people are claiming "OMG I will never get Vista! I'd rather go to linux!". I can understand not spending money to upgrade (which you won't be forced to do anytime soon looking at the support schedule), but not getting it with a new computer (it is likely to be priced pretty much the same as XP)? It
will have new tech built in, and it will get more tech (like WFS) later on which will be much better integrated then on XP. Is it the whole HDCP fiasco? What?
What was Microsoft supposed to do anyway? Upgrade XP piecemeal with various tech (WPF, WFS, new UI, etc) until eternity? Even with phasing out support for older service packs, it would be a disaster for shrinkwrapped software developers in terms of testing and tech support. Not to mention that certain sound policies (like not changing the UI within a product as much as possible to assist buisness) would really make it unfeasible in the long term.
P.S. Can we keep a little sanity in these threads please? Stuff like "Will it play DRMless music?" or "It will have hardware requirements on the level of HL2" is, quite frankly, absurd if you have even a basic understanding of the history of Windows and the design philosophies behind it. Hello, this is the company which focused on security over backwards compatibility only relativly recently and only then because it was basicly forced to. Also, this is an OS that will run on much more buisness computers then gamer computers. Think before you post such absurdities.
EDIT:
Windows Life-Cycle Policy
Microsoft Support Lifecycle Policy FAQ