This /. post neatly captures my own feelings on the subject:

Microsoft had some good standards but they constantly ignore them these days. I saw a quote that thanks to Web application, which forces people to use really crappy UI, and the preponderance of high-resolution with lots of colors and everyone trying to take advantage of it (skinning is just another word for “angry fruit salad”), UI has been set back to about 1984.

And this tendency to make regular Windows apps look like Web pages is just ludicrous. There were so many violations of common sense in just the installation of Visual Studio .NET, I could write a book about it. The app itself isn’t too bad, but in some ways Microsoft has become the worst UI innovator because they are making lots of stylistic changes that have a negative effect on usability.

You can read the other side of the story (about Inductive User-interfaces) on MSDN. Frankly, IUI works well for certain classes of problems. Good examples include Money, Management Console, Office XP’s Task Panes. But IUI can be carried too far– look at Windows XP’s horrendous (default) Control Panel interface, for example. There, trying to find any given applet is by and large a trial-and-error affair.