Much better than Vista, and UAC is less annoying than in Vista as well. It can also be completely turned off if one wishes, which I don't believe was an option in Vista. Overall, I actually like it better than XP. The DirectX10 for games is nice, though Vista had that too. Windows 7 is what Vista should have been.
Hard to compare to Linux, I think; that's somewhat like comparing Chinese food to Italian. Personal preference more than anything, IMO. But within the Windows realm, I think it's pretty good. Those who like their OS stripped down as much as possible will probably want to stay with XP, though you can turn alot of the bells and whistles off if you so desire.
My perceptions may be affected by the fact that I doubled my memory from 2GB to 4GB at the same time I upgraded.