I don't really want to start a Microsoft vs. Linux debate, but have you tried a live CD, such as Knoppix, recently?
I've installed most Microsoft OS's and a few Linux distro's so I've got a good basis for comparison. By far the simplest OS to get up and running that I've used is Knoppix.
I've tried it on both new and old hardware and it run's quite happily with no configuration required in 90% of cases. It includes various office apps, various browsers and email clients, lots of system utilities all out of the box and it's extremely cost effective (Free, as in beer
)
The only downside to it is the speed, as it's running off a CD.
I think project's like Knoppix will drive Linux forward on the desktop as it's a good way to take a look at linux without risking your existing config. As people start seeing more of Live CDs I think they'll start picking up some of the "simple" distro's. I've not looked at it for a while, but last time I used suse (18 months ago) it was fairly user friendly out of the box, the only snag I hit was guessing details for a laptop display, installing new applications was very simple with yast.