] "Once upon a time, computer users felt obliged to upgrade
] their machines on a regular basis. But sales of the
] desktop PC itself have been basically flat for a couple
] of years now."

The PC industry is becoming similar to the automotive industry. They were close to this point in 1993/4, but the internet, and high definition multi-media provided a dramatic new capability set that needed to be supported, and things moved forward. They are going to stagnate again. None of the ideas at the computer companies are going to be nearly as compelling as something like the net, because those ideas are based on what these people need to sell rather then what customers actually want to do.

People will cross-grade because they need to escape DRM, or they may upgrade to something capable of doing digital video editing IF bandwidth and costs improve to make this accessable to the consumer for daily life sort of media work.

In short, we've got what we need. We need to figure out how to use it.