I sure hope they get to cooperate and share new code and bug fixes with KDE4, because some of the greatest software that come with KDE actually had the same goodies and bugs in both KDE3 and KDE4. The ones that come to mind are Kate and KWin. Best KDE programs are far from being rewritten from scratch in KDE4.
At this point in time though, I consider KDE4 satisfying and I wouldn't replace it with another desktop (be it a free-software one, or Windows/OsX). Surely, there are still regressions over KDE3 (SystemSettings seems more untidy than KControl was, the new NetworkManager interface behaves worse, etc.), but long standing bugs do get fixed, Plasma is finally stable and I like the new panel more than Kicker, Dolphin does a great job, GwenView and Kate get new features, etc.