Did Sugar (a Linux flavor) really win the day here or did Microsoft instead simply become distracted with other things during the economic crisis? It is something that is still frankly, up for some debate.
The one thing that is not debatable is that many countries that inquired about getting OLPC netbooks/notebooks opted to go with the Sugar OS in place of Windows XP. Makes sense to me, considering the massive security nightmare it is to select an old, insecure version of the Windows OS from 2001.
Is using Sugar the best thing to get kids used to working on? Well, I see it this way. Unlike so many adults out there, kids can learn and unlearn a new UI with lighting speed. So if they start out on Sugar only to later end up on Windows, Ubuntu, whatever, it will not be a problem for them. Kids are sharp like that. Sugar is simply a means to helping them get started in the computing world.