Operating systems are funny things. They take FOREVER to develop, for example, and I don't just mean Haiku. Look at the development time for Vista. It took a multi-billion dollar corporation for than five years to write the upgrades for XP.
There's also a chicken-and-egg problem that fledgeling OSes have: how to get an OS without applications and how to get applications without an OS. Luckily for Haiku, a lot of that problem has been mitigated by BeOS' startup history. The QT4 port just saw a 4.7 release. I'm really thankful for the efforts of those guys. Other people like Michael de Vincius Oliviera and the HaikuPorts team have been hacking away at porting stuff from other platforms. While they certainly don't have all of the BeOS goodness of a native app, at least we have some of these apps and games. KOffice takes a team of dedicated developers that is IIRC larger than our OS team alone. We're really starting to get a lot of useful apps.
Stability has always been my sticking point for coding under Haiku, but at least in my experience of late, Haiku's been pretty stable, all things considered. I'm typing this from a GCC4 hybrid build that I installed from sources. So far Paladin hasn't been plagued by deadlocks like it has been in the past, which has led me to believe that it was never Paladin's problem in the first place, but the jury's still out on that one. I'm even working on more features that will only work under Haiku and fixes for the platform, like using rsync to properly synchronize modules for the code library. In the last couple of days I worked with a couple guys on the team to nail down a bug in Terminal which was preventing Paladin from running applications in the debugger. After patching both Paladin and Terminal, it works beautifully now.
Feature-wise, Haiku is even now doing an admirable job of playing catch-up. People in the past have mentioned that R2 would be the release where Haiku would implement all the features that BeOS was missing that all the other OSes have, but more and more I don't think it'll take that long. OpenGL stuff might, but the Google Summer of Code has been good for that. There have been other people who couldn't wait that long for stuff like WiFi, so even now that partially works. Simple amazing, if you ask me. Then again, even though it's been slow, Haiku's progress from the outset has been that way, too.