I was recently asked whether MSCS/WSFC will become obsolete due to 3rd party HA solutions. I think there will always be a market for 3rd party HA solutions, but many of the enhancements delivered with Windows Server 2008 have reduced the need to explore alternate HA solutions. I think the greater threat to MSCS/WSFC is HA solutions provided by the virtualization vendors, such as Microsoft’s Hyper-V failover clusters (which actually uses WSFC) and VMware HA. These solutions provided by the virtualization platform provide protection in case of host failure, although they currently do not have visibility into the application that is running within the VM.
The real question is what kind of failure do you want to protect against? If physical server failure is your primary concern, then in some cases where MSCS may have previously been deployed, you will see Hyper-V Clusters or VMware HA being deployed instead. In other cases where MSCS/WSFC may have seemed like overkill or was incompatible with the OS or application, you will instead see clustered VMs being deployed because it is easy to install and it supports all applications and operating systems. The mere fact that more workloads will be running per physical server will make it imperative to have some kind of clustering solution so that the failure of a single server does not bring down your entire infrastructure. In many cases, this clustering solution will be provided by the virtualization vendor.
Hyper-V Clusters and VMware HA are easy to implement and have a broad range of support as the protected VM can be running any OS or application. The tradeoff is that you lose the application level monitoring included with MSCS/WSFC. There will always be a class of applications that need application awareness, so MSCS/WSFC or other HA solutions that manage application availability will always be needed to ensure that the application is available, not just the server itself. With that being said, MSCS/WSFC will not become obsolete, but you will see it deployed alongside other cluster solutions provided by the hypervisor vendors..
Clustering For Mere Mortals 
An interesting thought David. Indeed there is a need at the Enterprise level where MSCS or Veritas Cluster is favored for application high availability to re-look at doing HA with virtualization solutions. In my opinion the missing link seems to still be the need to having to cluster at the guest VM level for protection against the application or OS corruption such as BSOD. The host level clustering whether it be with Hyper-V WFCS or with that of HA/FT with VMware, for complete high available solution you still need to protect your VMs (and apps running atop) from problems other than that of hardware. I hear that SRM can revert the corrupted VMs to snapshots on the fly whereas with Hyper-V, you still need to cluster at the Guest level. I am trying hard to find clear cut answers to this topic.
Keep up the good work.
Were you able to find a failover solution that accounted for OS corruption?
Yes, a traditional guest based cluster is your best HA solution if you want to protect against OS corruption ina VM. None of the Hypervisor HA solutions protects against OS corruption or Application corruption.