With Adobe's recent announcement about bringing Flash to the desktop (Flash to jump beyond the browser) they have taken some of the thunder from Microsoft's own plans for rich-client applications.
Microsoft's strategy centres around their upcoming Expression developer tool set, which includes a graphic design tool, an -interactive" design tool and web development tool. A lot of this technology hinges on the upcoming Windows Vista release but has yet to see the light of day.
With Adobe's announcement, they are moving one step closer to making Flash the preferred delivery method for rich-client applications. It will be interesting to see whether or not Adobe can win over hard-core developers, in addition to their core graphic design and creative base. Only time will tell.