The "Show desktop" button occupies a prime piece of real-estate on your screen. The lower-right corner of your screen is one of the most easy to reach points on the screen with a mouse. Couldn't this button be made to do something more powerful than just to show the desktop?
By default the new win7 taskbar groups live previews of windows by their program. What if you want to be able to see live previews of all windows from all programs at once, without having to reach for the alt-tab keys?
-No mouse-driven Mac OSX Exposé killer in Windows; Alt-Tab is keyboard only.
-No multiple desktops support in Win 7.
See first mock-up image. Still keep the show desktop functionality (by a long single-click to show the desktop), but allow a hover/short single-click on this icon to show live previews of all open windows and allow aero peek. The desktop itself would always be the right-most live preview.
A double-click or Ctrl-click on this icon would switch to the last used window, and further double-clicks/Ctrl-clicks/rolling-mouse-scroll-wheel would toggle through windows (thus implementing a fully mouse-driven version of Alt-Tab). A right-click would bring up an appropriate context menu.
Optional enhancement to this for power users (not enabled by default) - allow this button to act as a novel switcher between multiple desktops/tasks (stacked vertically) - see the second mock-up image. I think this is more advanced than any Linux multiple-desktop implementation. Middle-clicking or clicking on the "+" icon will open a dialogue window to create a new desktop/task.
[ idea inspired by :