Avalon

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Marc Canter tries to summarize Avalon, a forthcoming user interface technology in Microsoft's next OS Longhorn:

Avalon is an entirely new rendering model baked deep into the OS.  It's  Flash killer, HTML disintermediator.

Not that I doubt for a second that Microsoft is working on a Flash killer, but does anyone else see something deeply wrong here? How something that is baked deep into the OS could possibly be compared with technologies that are, basically, OS-agnostic? Shall we see this as yet another proof that those technologies are, indeed, a serious threat to the Windows OS monopoly?