It appears that Mac OS X 10.6 "Snow Leopard" will be coming this fall. $29 for an upgrade really isn't that bad. However, maybe the bigger question is: will it really be worth upgrading from 10.5 to 10.6? I'm sure most people will spend $29 to upgrade.
I wonder if Microsoft could learn from Apple's example. If Windows 7 is only considered a "minor" operating system update, then perhaps Microsoft should also charge $29 for the upgrade from Vista to Windows 7.