Tom Merrit over @ Cnet.com has a great article about purchasing a new laptop and wanted to see just how far he could go without having to pay for any software.
Tom's top picks were the Mozilla suite for email/browser, openoffice.org, Skype, the GimP, Audacity, Itunes, and iPodder. I would also add NVU to that list for a really good Dreamweaver replacement as well as Filezilla for FTP. Today you can pretty much do anything without paying a dime, with the exception of Accounting and Exchange Mail server type functionality (which is pretty important)
With the impending adoption of the Windows Genuine Advantage program, watch the exodus begin from M$ to opensource and alternative Unix based OS's. It is much the same argument the proponents of online filesharing make, when critiquing the RIAA going after 14 year olds with 500 mp3's on their PC. The kid wasn't going to buy those songs anyway. Microsoft will find the same thing. A ten year old kid isn't going to shell out 700$ for an OS and some email program, if he can't pirate it, then he will just move onto something else, which is a very dangerous option if you rely on hooking people when there young. Hmmm, sounds like big tobacco.. :)
Pirating M$ software has created an entire generation of people that are Windows only, watch that market share collapse when you create an entire generation of computer users that are familiar and embrace opensource.