I can't think of many things you can do with Windows that you can't do with Linux - really I was making the point that out of the box, Windows has some additional features including hardware support, good usability, consistent UI, sound that always works, etc.
Generally I can load up a Linux box with far more apps and it's still stable. For example, my main Linux desktop can do email, browsing, video, VoIP, VMware, web serving and OpenNMS all at the same time, but I wouldn't dare do all that on Windows. Hardware support can be more problematic if you don't choose the kit carefully, but generally most things work "out of the box".
Linux also scales down much better of course - I've recently been hugely impressed by SliTaz, which needs only a tiny amount of RAM yet still supports Firefox and other modern apps, and has a very light Debian-like package system, and by Crunchbang, which is a very light Ubuntu (much less than Xubuntu) while also coming with Java and Flash pre-installed. Either of these is great for older PCs with 100MB or 200MB of RAM respectively, on which XP would really struggle and Vista would not even install.