Not only a monopoly on windows (that's the one which is enforced by copyright law), but also a monopoly on 'an OS that runs windows applications'. Wine is the only worthy competitor: all other alternatives are either based on Wine, or run windows inside a virtual machine. Wine is very nice, but it's still unfinished.Long-lasting monopolies generally occur in one of two circumstances:
1. Markets where costs reduce with increased size.
2. When they're granted by the government.
Microsoft is in the latter position, as they have a government-granted monopoly on Windows through copyright law.
When it comes to standards and interoperability, this is the important point. Many software vendors still consider it acceptable to ship only a windows binary version of their software. This locks their users to windows. For many office and creative software there are already good multi-platform alternatives, but this isn't the case for games. Which is strange BTW, as most games have to be designed in a multi-platform fashion anyway, to be able to run on all those game consoles. I think it's just commercial laziness, caused by a lack of demand for, say, Linux x86 binaries.
You're probably right. The desktop is the 'holy grail' in Linux adoption, but for the rest it's already quite settled. Cell phones and the new ultra-cheap laptops are more important, as they could be a low-end entrance into the desktop, making people familiar with the system.I'm not sure why you say 'the road is open'; Linux is already one of the most popular embedded operating systems in the world, if not the most popular. I wouldn't be at all surprised if there are already more embedded Linux systems than Windows systems in total.