Microsoft has run into certain issues that basically forced their hand:
1/ The length of time to bring out Vista. The gap between versions was too long. The time it will take the market to replace 99% of XP is therefore going to be longer.
2/ The UMPC format as exemplified by the EEEPC. Vista can't run on it and that gives Microsoft two choices, let a booming new market fall to Linux by default or extend the life of XP. They have extended the life of XP Home explicity for that market.
3/ Active market resistance for Vista. People are saying they don't want it to an unprecedented degree. This makes the transition to Vista even slower and mandates longer support of XP.
4/ Government pressure. There are a variety of on going anti-trust lawsuits around the world, notably n the E.U. and dropping XP support when there is clearly still a demand illustrates that Micorosoft has the monopoly power and uses it to compell the market place. They need to give the illusion at least that the market influences them and they are not the "all powerful Microsoft" they are reputed to be.