KDE 4.0 is now nearing completion, with the release event scheduled for 17 January 2008. The desktop interface is being finalized now, and the 2nd Release Candidate has already been released, providing an early look at the new Plasma interface.
Although the background APIs and data structures underlying KDE4 were finalized a while ago, Plasma is only nearing completion now. From the various previews around, it looks as if KDE 4.0 is going to be the introduction to a new era in the evolution of the Linux GUI. Plasma looks really smooth, and the APIs behind it are just as neat.
Unfortunately, I can't seem to build the RC2 properly. I keep getting a segmentation fault. So I can't give you a first hand account of KDE4 (yet!), but for more info check out the official announcement - it's got heaps of screenshots.