Well yes you can do just about anything on Linux that you can do on Windows (and a lot more actually).
Some big things that don't work out of the box with most if not all distros for legal reasons are DVD playback, and MP3 decoding, since both these require licenses. You can easily get around these things, but out of the box they don't work.
Also, getting used to the unix style file management and organization can be daunting if you're hardwired for Windows. I find that I can do just about everything I want in Linux (with the exception of AviSynth, which is a requirement for doing really effective video encoding), but on Windows I can do it a lot faster and easier. Most of this is due to the fact that I'm damned good with Windows and have been using it for so long. It also has a lot to do with the commercial software that I use (and many use illegally) like Photoshop, Lightroom, Premiere, Sound Forge, Acid, and Reason all of which are essentially unequaled in Linux. Yes GIMP is great, maybe even better, but who really uses it for professional work?
There are really no decent video editors in Linux
There are some great little basic editors that sort of clone iMovie / Windows Movie Maker, and some awesome VirtualDub workalikes that are actually better IMO (like AviDemux), but for real DV editing there's nothing out there.
Still, that's all content creation, and most people only dabble in that.
Gaming as we all know is pretty much a no-go. Yeah yeah wine, etc... I don't care. It doesn't work well enough. Period. 802.11x networking has always been a MAJOR headache for me, particularly getting WPA encryption working properly.
If all you need to do is edit office documents, browse the web, listen to music, and maybe do some photo management, then Linux is a totally feasible "drop in the cd, install with defaults and go" OS, and comes with so much good stuff it's hard to believe.
Obviously, its development features are incredibly good, and the open source community is a tremendous asset.
Gamers, creative professionals, and "average" prosumers need not apply in my opinion. To really embrace Linux and leverage its advantages, you would ideally be a software developer, or all-around geek who's willing to start all over (assuming you're a Windows person, as the vast majority of us are). I'm a hell of a geek, but I'm not willing to start over (or loose AviSynth and gaming for that matter
)
Anyway, Linux is great. Anyone who uses it should be applauded in my mind. It's ESPECIALLY cool for building a specific use system, like an HTPC, a router, or a VOIP server.
Just not for me
~MiSfit