Looking into the future, we will ship Longhorn (the next version of Windows Server) in the second half of next year, and we will ship a 32-bit and a 64-bit version. That will be the last time we ship a 32-bit version. From that point, the next release, which will be roughly two years later, that product will only be available as 64-bit.
I remember the transition from 16-bit Windows to 32-bit Windows in 1995. As part of a consulting contract earlier this year, I did a lot of research on the years just before and after launch of Windows 95. One thing that I had forgotten until I went back and dusted off books and magazines from those days was how long the installed base of 16-bit programs survived. I continued to use a handful of favorite 16-bit programs for several years, and in fact I just abandoned the last one a few weeks ago. (I wish that FileSync would appear in a 32-bit version, but alas, the Latest News page at FileWare's site has said, "The long awaited new release of FileSync is still under development" for at least four years now.)
During the current beta cycle for Vista, I used a 64-bit version as my main desktop OS for about a month. I was impressed with how smooth and trouble-free it generally was, although that positive feeling was greatly aided by the fact that I was able to find signed 64-bit drivers for all my hardware. My 32-bit programs ran just fine in a 32-bit subsystem, just as my 16-bit programs did back in the days of Windows 95.
This sort of transition is never completely painless, but the presence of side-by-side 32-bit and 64-bit Windows versions, first in Windows XP and now in all editions of Windows Vista, makes it much easier than a complete changeover would be.
With the exception of bargain-basement blowouts based on the last trickle of the Pentium 4 and Celeron product lines, virtually every new PC sold today is capable of running a 64-bit operating system. In fact, it's pretty easy to find a 64-bit system with adequate RAM for well under $1000. But you'll have to jump through a lot of hoops to load a 64-bit operating system on that box. Most PC makers don't offer 64-bit software on their mainstream lines, and Microsoft has decided, sensibly, that it won't include the 64-bit version of Vista in any of its retail boxes; you'll have to order a DVD and have it shipped separately.
The real barrier to wider adoption of 64-bit technology isn't hardware or the OS. It's the lack of compelling software. On the server side, there are great reasons to move to 64-bit technology for scaling databases and handling massive numbers of transactions. But where are the equivalent challenges for desktop users? With the exception of people running workstation-class video editing systems, who needs a 64-bit system?
... Oh, and did you notice the date casually tossed in there? "[T]he next release, which will be roughly two years later..." Wonder if the same applies to desktop operating systems?