That never happened (and I agree may not ever happen), but I think the growing widespread adoption of non-pc computing devices (phones, tablets, tv's, etc.) definitely has a fighting chance. Within ten years, I'd bet that the vast number of people will be accessing the internet primarilly from something besides a PC.
Now look - Firefox is sitting comfy, Chrome is a rising star, and on mobile, webkit browsers owns the whole place.
Windows can and will fall. If Microsoft is smart, they'll be the ones that put it to rest (like Apple had the mock funeral for OS9) on their own terms.
That's not to say that Windows can't get displaced, but that it's a lot different from displacing IE. You can't just switch from Windows and have nearly everything working the same from day 1.
That sounds about right, except what is Windows Mobile doing there? It's a pretty tight race for third place, and I wouldn't bet on Microsoft there.
WebOS has a technology advantage over Microsoft's offering, but a bad starting point. Still, I would not rule HP out.
But to be honest, I am not sure third place will be a significant thing. The mobile market is looking to repeat history with how things turned out on the desktop. Do we care much about third place there? Not really.
The point is, I already carry around a phone in my pocket, and eventually, when I get into the office, I will hook it into my monitors/keyboard/mouse, and work away. The PC cannot keep up, and will eventually be replaced by this paradigm.
Then there's the question of computing power. Recent mobiles look powerful, but that's because you're comparing them to older mobiles and not to desktops/laptops. The MIPS you can squeeze into a mobile will always be constrained by heat, and you're just not going to get anything like the same snappy response you would from a dedicated machine.
5 years from now, it won't be a windows world. Consumers will be spending most of their time using iOS, Android, and Windows Mobile devices. On the server, a large % of apps will be written on a layer above the OS (GAE, Azure, Heroku, DjangoZoom, ...).