Linux is the server operating system, but honestly I wouldn't consider it on the desktop - except for development. I've installed Ubuntu Karmic on my Thinkpad X60s as a dual boot with XP for one reason - as a platform for developing an Django application. The deployment issues I had with my last application, a Rails project, developing on XP then migrating to Linux (especially with Imaging libraries) was unreal - so I'd prefer to develop on the same platform the application will run in production.
My first instinct was to run CENTOS, the same platform as my host, however I stumbled across the ChromiumOS build page and it was clear Google developers were using Ubuntu Karmic, so I thought, if its good enough for them, I'll try it. Honestly I'm very impressed, it was actually a slick experience. I run Windows 7 on my desktop at work and on my Media PC, and the experience isn't better (and of course the compatibility isn't there on Ubuntu, however for developing a Django web app, in Vi and using all the nice Python deployment tools Ubuntu is ideal.
Basic stuff, but this article helped me get the default GUI how I wanted it: