Information Week had an interview with Linus Torvalds on where Linux is headed in 2008:
InformationWeek: In your opinion, where does Linux shine versus Windows? Reliability? Virtualization?
Torvalds: I think the real strength of Linux is not in any particular area, but in the flexibility. For example, you mention virtualization, and in some ways that's a really excellent example, because it's not only an example of something where Linux is a fairly strong player, but more tellingly, it's an example where there are actually many different approaches, and there is no one-size-fits-all "One True Virtualization" model.
There are many different levels of virtualization, and many different trade-offs in efficiency, management, separation, running legacy applications and system software, etc. And different people simply care about different parts of it, which is why the buzz-word "virtualization" shows up in so many places.
And not only do we tend to support many different models of virtualization, but one telling detail may be that I am personally so totally uninterested in it, that I am really happy that I have almost nothing to do with any of them...