It seems Lindows is trying to do, in one environment, what Wine or VMWare do already.
I've seen games run on Wine fairly well, and I've seen linux (Redhat) with VMWare workstation run games off of 98SE. Only problem with VMWare, my choice, is that you have to have some pretty hefty processor power, sizable disks, and a fair amount of memory due to the fact that you're 'hosting' a guest OS. Something that VMWare has conquered is getting "thousands" of popular windows applications to run on linux through it's interface. That's all well and good but until I can just buy a game off the shelf for windows (because now that Loki is gone, it's up to the vendor to create linux games, and I just don't see that happening) and play it on my linux box through wine or vmware, I'll just stick with Windows and a separate linux box. VMWare has a ways to go because everything is emulated (like others) and not all games like that.