The fantasy of hardware support
"Therein lies the problem - the eight hundred thousand slightly different distributions. Most people don't want to try them. They just want their computer to work, which is why XP has had such a long life."
Yup, but people who say "they want their computer to just work" and then say Windows is the way to do this gloss over that, in the Windows world (assuming enough RAM and CPU power), the XP-compatible hardware may or may not work in 7, newer systems are compatible with Windows 7 but not XP. Of course the really old ones would have 95 or 98 or 2000 drivers but no support for XP. This idea you can just stick whatever verison of Windows on whatever hardware you want and expect it to run is sheer fantasy. You can keep running the same version for ever if you want, but of course, you can do this with Linux too.
Ubuntu tossing out some compatibility, I do give them a "thumbs down" for this, and just saying "you can run some other distro" is not helpful, but the fact of the matter is you DO have the choice of an up-to-date distro that supports older hardware rather than just sticking to an old distro (as happens in Windows if a newer version drops support for older hardware). BTW, I'm pretty sure Geforece 4 MX440 is now supported in 12.04 at least by NVidia's driver.
"The idea that rpm and dpkg are anything like as user-friendly as setup.exe is a joke. Truly, this year and the next hundred years will not be the year of the Linux desktop."
Yeah, it's easier. Pick the software you want to install and it installs, versus finding the exe, scanning it with a virus scanner (wait, you don't do that?!), and then persuading the installer "No, I don't want a toolbar, no I don't want this 'extra bonus software', and no I don't want you to send my E-Mail to a spammer". Then it will also be yet another thing that pops up to hassle you when there's an update, since there is no central update mechanism like a package system like rpm or dpkg have. Not running a random executable to install software takes major getting used to, but your argument against it is basically you don't like it because you aren't used to it.
Anyway... I'm a little mixed on shipping Ubuntu 12.04 to people. Unity is AWFUL, the first thing I did was install the "gnome classic" desktop --- except they call it's package "gnome-session-fallback" so if someone installs Ubuntu 12.04 out of the box, they are unlikely to figure out how to find it. (Basically, similar to Microsoft trying to shove a tablet interface down people's throats with Windows 8, Canonical tried to shove what is clearly a tablet interface down people's throats in Ubuntu 12... once you kick the tablet interface to the curb everything is quite nice however.)
I've got several people now running Ubuntu... I didn't replace *working* XP for them, but virus-shredded non-functional XP (and of course they have no recovery partition and no CD.) A surprising number of people have a "laptop" (which they call it that even if it runs far to hot to ever put on a lap), they use it to do junk on facebook, play facebook games, watch streaming videos, and watch downloaded videos. Seriously, that's it. They have enjoyed having their machines run faster than they were before even when clean, having only *one* thing hassle about updates, and not getting viruses so frequently (I assume from porn sites, but maybe misclicking on free video sites.) They don't miss a thing from not running XP, and these systems would run 7 VERY poorly.