I read this whole thread, I didn't really want to, but interesting stuff kept being addressed.
Reply #27 Was a fascinating real life story by Xenaflux.
The key to this is Xenaflux gets paid to make people happy using Linux.

I suppose for the initial problem of people not knowing what programs do what, honestly it is part of the whole learning experience, and understanding initially you'll be tied to the Forum to ask questions, or read.
I've setup PCLOS for my Ex-Wife in the past. I ask her; "What do you want ?"
She gets Abiword, MPlayer, Firefox, and Audacious. She was happy and went about using as if it was a Computer she was using always. From time to time, "But I don't seem to be able to do so, and so."
I install the appropriate program, and be sure to say only use Favorites, "that's where your programs are."
Two types of Users, one wants to just use it; the other, like myself will install programs that I need from looking around, reading descriptions in Synaptic, reading the Forum.
From Neal:
I understand about wanting to help newcomers. I do not understand the request to "make it more like windows" or "create a new ISO that looks/works like windows." There is a learning curve for anything that is new to you - no matter what it is. Would you start a new job and insist that it be like your old job, so that you didn't need to learn to do things differently?
Absolutely, these Distros are free, people who help are volunteers.
I've used MiniMe always, but it says it's for Advanced users, well four years later maybe I am. I don't want Bluetooth, and Faxes, and Printers. That was my sole reason for using MiniMe.
But, now I can tailor make to a persons needs an OS that they like, and people really do like the speed, no Anti-Virus crap to update, they feel liberated.
It does depend on the person very much so whether they will take to the learning curve if unassisted, depending if they are a Computer USER, or Technically minded.
A Story about can't find stuff; years ago a friend proudly was using his new Win XP Computer, then wanted to quit. But The 'Start Icon' said Start, so that obviously wasn't were he should go to Shutdown, ... an hour later he rang his Son.
He explained that you do in fact click on 'Start' to finish a session in Windows.
If they can all figure that out, they can use PCLinuxOS very simply, especially with the amount of 'ToolTips".
Also. I think we may forget how if you've used a Computer, things are set out in a pretty intuitive way, just to help with its usage.
I'm from the, " Not too much cli thanks generation."
We do have GUI's in Linux now, which is drawing people to it. If they can use a Phone, or Game console, Sat Nav, they can relate to the intuition of Computer GUI's.