Windows 7 is the OS of choice for HTPCs because Windows Media Center is excellent
No it is not
the OS of choice, for several reasons. For one thing, look up the digital and analogue "Broadcast Flags" and related Digital Rights Management garbage found in Windows to see the various ways in which Media Center takes away your rights to record what you want, when you want. How dare they make those choices for you, especially when there are no such laws or regulations in existence
? Another problem is that Microsoft does not allow you to add Canadian OTA TV stations. You would need to use the extensive workarounds developed by pnear that Microsoft has never bothered to fix after years of complaints here. The object of building an HTPC is seriously eroded when the OS is tying your hands.
and it lets you scale the UI (Control Panel\Appearance and Personalization\Display)
Screen scaling, transparency, PIP, captioning, and a variety of other visual effects are done excellently and routinely by MythTV on Linux, and with a choice of many, many UI themes too. Streaming, transcoding, ripping, video capture/authoring/editing, web browsing, archiving, widgets, program guides, signal analysis tools, and much more, are all in there.
Having said all that, Linux/MythTV is the OS of choice for HTPC, but if it is too exotic for you then look for a Windows-based HTPC app or solution that properly supports Canadian OTA and that respects your consumer rights.
Since the topic of the thread is "Do HTPCs become obsolete?" the answer to that question is no, because the consumer always has good options to adapt and improve their hardware and software.