Longhorn had a highly troubled development cycle that would go on for six years. Initially, it was not really even supposed to be a completely new operating system. Instead, it was meant to make incremental improvements to its predecessor, a model that proved to be inviable. Dial-up still had plenty of ground compared to broadband, and, at least by Microsoft's apparent standards, it would be too tough to sell CDs of such incremental improvements - probably why Windows 98 had to turn out to be a mess. It wouldn't be until 2015 that Microsoft would return to the idea of having a final operating system that's only incrementally improved, but... the way they went about that was far more menacing than any of us hoped it to be.
Longhorn made a lot of promises which it could not fulfill, so much so that in 2004, development of the operating system was reset to the codebase of Windows Server 2003 SP1. Its release name, Windows Vista, would be announced in mid 2005, and when it was finally released to the public at the start of 2007, it was heavily blasted in the press and by many consumers as "another Windows ME", in part due to its drastically higher system requirements compared to its predecessor, initial instability, various annoyances (Cancel or Allow), and underwhelming delivery. Do keep in mind that it officially required 512MB of RAM just to get by, yet budget computers sold in 2005 still only came with 256MB.
Still, Windows Vista made a number of drastic improvements in the Windows NT kernel, including the ability to recover from a video card crash. With two service packs and multi-core CPUs becoming more prevalent, Windows Vista would get better with time, but the launch disaster was too much for a large portion of Windows users. Many stuck to Vista's predecessor in defiance, while others ended up switching to Mac OS X, or perhaps Linux, even. It wouldn't be until Windows 7 that the perception of Windows would be more favorable again, despite it arbitrarily removing some useful things like tape backup and an image viewer that plays animated GIFs, as well as shoving the highly controversial "Ribbon" interface into many of its default programs.
As time has shown, Windows Vista may very well be the last time Microsoft ever makes a major advancement in the Windows NT kernel. Everything after it is nothing more than a glorified reskin of the operating system, or otherwise meddling in bad ideas that are likely what Bill Gates envisioned all the way back in 1997.