Ubuntu is a viable replacement for over 50% of the PC market, which is the internet-and-office-only group that requires only an MS-Office-clone and a good web browser, as well as protection from viruses. Linux offers all of this, today, for free, on very old hardware at reasonable speed.
However these people are the least likely to switch. Those most likely to are the informed and computer-literate, which usually include gamers (which Linux can't do no matter how good because developers refuse to port games*) and professionals (who use Adobe tools that again no one is willing to port but can't be replaced on Linux due to patent threats over the file formats and interfaces.
*Look at UT3 - promised for Linux, the code works, the market exists, but no release due to (as far as I can tell from frequent Phoronix reports) general Linux apathy over at Epic.
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