Well, keep in mind the cost of the Vista is a sunk cost for new machines. So while I've never supported upgrading the existing client systems to Vista I've no problem with letting Vista, now Win7, take over as machines are replaced. Yes, IT has the burden of supporting both the old & new OSes, and there will be a cost associated with that, but it is an option.
And as to what Chewy is saying, that is a good point. Companies buy computers for the applications. The OS decision is secondary and by and large is determined by what OSes the app will run on. That said, a business should never run on a platform for which there is no vendor support. The support doesn't have to come from the OS vendor, but it should be available from someone.
Merc, I smell a business opportunity for you. Set up your own VM server running XP & Win98 images and let people remote in to run their vertical apps.