The inclusion of Time Machine probably raises it a little beyond a service pack, but since every other OS has shipped with some kind of backup program since version 1.0, I can't really give them that.
...yet no other backup program has the user interface like TM. If you provide a "feature" but make it so un-intuitive that people never use it, what good is it?
TM's strength is not that it's "another backup", as it's clearly not if you actually see it in action. Can't find a photo? Hit the Time Machine icon, and whoosh - your current Finder/Iphoto window is still at the forefront, however there's a spanning tree of photo's that extend beyond into space, so you can scroll through dates without ever exiting the application and see instant previews before you restore.
It's a HUGE usability leap for backups - Vista's backup doesn't compare in this regard. Keep dismissing this stuff as "useless eye candy", and wonder why Apple's consumer marketshare in the US continues to grow each quarter.
Now, Vista Business/Ultimate has shadow copy, which has the advantage of not requiring a second HD like TM, which is good. However, it still requires you to interact with the file system, and for apps that don't feature obvious file names it's all but useless. Vista's backup is relatively simply to operate for sure, the problem is again - the interface. You're loading a seperate app that takes you away from the application you're trying to find data in.
Regarding Vista giving you "more choice", the problem is not necessarily the confusing product matrix (which is definitely confusing, especially when you hear people tout features of "Vista", yet don't mention that feature only comes on select versions). It's the price to get the features you want. Ultimate is extremely expensive when you consider that $500 desktops are one of the most popular PC segments right now for consumers.
So of course, get Home Premium. Whoops - no full-image backup, because why would a consumer want to restore their PC to the state it was before their HD crash - or, heaven forfend - choose what folders/locations to back up specificlaly?
No encryption - why would a home user want to protect their files?
No Bitlocker (Ultimate or Enterprise, which isn't even available to consumers).
No file versioning with shadow copy - as we know, consumers never accidentally overwrite files.
No joining to a domain. So I'm consulting for a small start up, and I'll just bring in the notebook with home premium to the office - uh, whoops.
Look, even with the ridiculous number of versions, if Ultimate was say, $150-$170 - the NON OEM version, that would be fine. But ~$320 for a version that has features that consumers will use - and hopefully with Leopard, will come to expect - is just idiotic. Sure you can save and get the OEM version, but then you're breaking the EULA if you install it on another PC later, considering Windows 7 won't be out until 2010 chances are you'll replace your PC/motherboard before then and have to call MS.
Hell, not to mention the massive hit your bank account will take if you want to say, install it on 3 PC's. Apple? $199 for *5*. All features.
Apple's done many, many things right with their rebirth recently, but MS has also held open the door for them.
Yes, I know Apple has the power of lock-in, it's a lot easier for them since they know if you're using OSX, chances are you spent far more than the cost of the license on Mac hardware regardless. But that argument starts to look weaker and weaker as the Mac has reached relative price parity (with equivalent features) of PC models, notebooks at least.
As well, homes with 2 or more PC's are very common these days, and MS has done little to capitalize on this trend. Just when PC's are the cheapest are more ubiquitous than ever, and just when MS's reputation is probably as bad as it's ever been - they decide to fragment their OS offerings like never before, and release the most expensive version. WTF?