that is asking much of SaaS / Cloud Computing.

I think it is more a question of standardization of application frameworks than OS'es. Think the browser wars: it's HTML/CSS/XHTML that acts as the standard medium and the browser is only a renderer. Standardized app interoperability is more important than how "fopen" is implemented under the hood. Think the CLI underlying C#,F#,VB#,J#....

The browser will definitely replace the operating system. In fact I think people will use Linux cores that only have a browser. If cloud computing takes off that's all anyone will ever need/want. With Google and many other companies pushing this initiative with projects such as nativeclient (check it out at http://code.google.com/p/nativeclient/) the operating system will die.

This might interest you!! http://www.decisionengine.com/Default.html

It also depends on what you meant by "fundamental software", speaking from the perspective of a software developer. An operating system's role is quite well defined: it manages and allocates a computing device's resources (memory, CPU etc). Can a Web browser fill this role, theoretically yes, but then it should be called an OS with a built-in browser 8-)

I work for a medium-sized government agency, and most of our apps have become browser based within the last couple years. However, our technology is usually woefully behind the times, so I'm not sure if it's the wave of the future, or if we're doomed to remain a relic of the past.

The question predicates on what you feel my need for the computer will be. By definition, there will quite possibly be things that my web browser won't let me do, unless we are to embrace the whole cloud computing paradigm, which is fundamentally flawed in the fact that I still need to be connected. There will always be times I need my data kept private. An unconnected computer is the easiest way.

Perhaps on a few low-end computing devices, for example, Netbooks, but I'm unsure of the time frame in which this will happen, as it all depends upon the future diversity and capability of mobile and computing platforms.

Google Wave.

For a while, that outcome did seem to be likely. Nevertheless, with the emergence and now the popularity of Adobe AIR, and Microsoft Silverlight, and no doubt similar or offerings coming into the market, I think it's iffy. For instance, if you use the Twitter Search on a popular topic, how many tweets are posted using a browser (i.e. from web)? Very few, most are from AIR based apps.

that's akin to asking if CFLs will replace electricity :) there's always going to be an OS there providing the translation layer to the hardware, running the network stack, handling graphical output, etc. The proper way to frame the question is whether the browser will consume and internalize all other desktop apps, regardless of OS.

it already has for me. for example, my NIH grant review for ARRA/HITEC is all online, but sucks in terms of responsiveness and uptime, so i'm reverting to looking at the cd-rom pdfs they sent me