Ubuntu 9.04 (itself derived from the ur-distro Debian) was recently released to remarkable acclaim; one pundit going so far as to call it a Mac-challenger, somewhat ironic given that the Mac is itself UNIX-based.
Red Hat has established itself as the server distribution, although its community-oriented distribution, Fedora, doesn't quite have the same mindshare among desktop users as Ubuntu.
SUSE, Novell's distribution, has made a name for itself thanks to tight integration with heterogeneous networks (or, as some people put it, bowing to Microsoft, but that apparently hasn't hurt sales).
Taking Measure Of Their Merits
It's a little tougher to draw direct comparisons between Windows as a whole and Linux as a whole. What Windows 7 represents vis--vis its Linux competition is three-fold:
A better use of existing resources (for those who complained about Vista's memory requirements);
A slicker-looking presentation that also adds usability; and
An intelligent use of new technologies such as virtualization and network presence
Linux has its own raft of native merits:
A far lower cost of acquisition (you pay nothing for the software, only pay for support if you choose to);
Less hardware and de facto standards lock-in; and
Much less effort involved to determine if it's a good fit (boot the CD and try it)
Here's the short version: if you buy a new PC right now, even a modestly equipped one, you can run Windows (XP, Vista, or 7) with little difficulty, along with your pick of Linux distribution. The long version is a little more complicated.
When XP came out in late 2001, there was more than a little grousing about 128MB being the minimum memory needed to install the OS. Microsoft hedged its bets and predicted that by the time XP really took off, the baseline level for hardware would have more than risen to meet its needs. The company was for the most part, correct, but it made the mistake of assuming it could do the same thing with Vista without backlash.
By the time Vista came out, the average PC was outfitted with 512MB or even 1GB of RAM, and by now 3GB, 4GB, and higher are routine -- but Microsoft's insistence on needing 512MB to even install Vista caused a great hue and cry. Such anger put pressure on Redmond to deliver a successor that runs leaner.