I'm not buying it.
As far as i can tell there are four main reasons people use Linux:
1: Open source. Sure he mentions there's open source software for Windows but that's not new to Win7 and the OS itself still isn't, and probably never will be, open source.
2: It's free. Good luck on that one MS!
3: Sticking it to the man. Once again theres really nothing MS can do about this.
4: Low resources & handhelds. MS might be trying to break in here with Windows7, i've heard vague rumours of ARM builds, but from what i've seen Linux still has MS beaten hands down and probably always will. Or at least for a good deal of time yet. There's already flavours of Linux that are appropriate for this purpose. Windows7 isn't. There was a post on another thread on this forum where someone had said they got RAM usage down to 300-400MB(and if he's reading this i'd love to know how, lowest i could get was 700~) but that's still too way, way too much for this. There are modern flavours of Linux that can run in the single digits of megabites, if not less!
Windows7 is probably more appropriate for most users then Linux. But so is WindowsXP and Vista. There's little specific to Windows7 for this. And it's more because of compatibility with commercial software then anything inherent to the operating systems. You can't even really compare Windows7 with "Linux" because there is simply too much variation on Linux builds. He mentions that Win7 installs easier, for example, but ubuntu installs just as easily. In fact they both install more or less exactly alike as there's really no other way to do it. Pop the CD in fill out a bit of location/username/drive info and away you go. If anything ubuntu is easier, at least if your trying to maintain mutliple OSes on different partitions.
The general press that Vista sucked may have motivated more people to try Linux, and Windows 7 so far has much better word of mouth which should help. But it won't "crush" anything. Most people who use Linux as their primary desktop aren't going to switch for Windows7, some people who may have been considering switching to Linux because of Vista may not. But that's a far stretch from "crush"ing.