Is Microsoft's Longhorn project going to make a big impact on Mozilla?
Probably not for years, and perhaps not ever. Longhorn basically supplies a new-style desktop and a new-style development environment for programers. Neither of those things automatically translate into credible end-user applications. Developers interested in Mozilla and other Open Source products are unlikely to be tempted by Longhorn. So neither end-users nor developers are persuaded by the technology alone.
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What Longhorn probably will do is stimulate ideas in the Mozilla community, and in the Open Source community in general. If Longhorn has good ideas, then similar ideas are bound to appear in the development and desktop parts of that movement. That's as good for Mozilla and Linux as it is for Microsoft.
Longhorn doesn't run on Macintoshes or Linux, so those users probably will see no effect at all. Longhorn also supports existing applications, so Mozilla will run under Longhorn for a long time. Mozilla already integrates nicely with Microsoft Windows, and there's no reason to think it can't also integrate with Longhorn, once that technology is more than just a pile of maybes.
Microsoft's big goal is probably to upset the application model we're all used to. In that model, you pick which application you want from a menu of options, or by navigating to the URL of a web-hosted application. Microsoft would probably like to change that, so that the idea of an application disappears altogether. By doing that, they can fight Linux and the Web and at the same time steal business from traditional competitors like Oracle and Adobe. They're not aimed at Mozilla specifically; in ten years time they'd like to overbear everyone.
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