They use a Web browser, email, calendar, word processor, spreadsheet, an image editor, and a dozen smaller proprietary apps that are absolutely essential to their job.
I think it may be the last of those... all the various industry specific apps that are hindering Linux as much as the obvious big players like Microsoft. I think word processing on Linux is fine; but your company's eight year old customized CRM tool will never, ever, be available on anything but Windows. Or specialized document scanner. Or sales commission tracker.
When people say that "X has no alternative for Excel", that X includes Windows as well. As a good rule of thumb: If there actually is an alternative on Windows, then there is also one on linux.
Microsoft appears to have taken a step back from their long-held focus of not breaking things on upgrades.
Granted, these clients should not be using Win9x apps still and hoping for compatibility.
I use gimp and inkscape sometimes.
Gnome 3 is perfect for 99% of what I need it to do.
I still own an iPhone, it compliments my Linux laptop well where I do my serious work, the phone is a toy.