In the jungle, the mighty jungle: the OS sleeps tonight.
I have no doubt that Tiger will support G3 computers -- this will simply following in Pather's footsteps as being a feature-fest for Mac users with some stability thrown into the mix. I think they're slowing down for several reasons:
1) Ideas that support this OS (& G3 technology) are getting more & more scarce. They pulled out a few great ideas last time with the improved finder, Expose, FileVault & Fast User Switching, but hitting a homerun time after time is going to take extra months and Apple is realizing this.
2) To support the current hardware (including G3), they're limited to what they can do technically. They have to wait some until G3s become even more History, which will be a bit tough considering it shipped with iBook for so long. I'm will to bet that OS 11 won't support G3s.
3) I woner how many people are running Panther... perhaps, financially, it makes more sense to wait. Releasing too frequently could be hurting sales with people deciding to skip a big release. I know plenty of people who are still running Jaguar. Maybe when "Lion" comes out, it'll be numbered 10.7 so people will think "My God! They're going from 10.4 to 10.7! I've got to get me some of this!"
4) They need to save some big tricks for OS 11. I truly believe they have quite a good idea about the feature-set for this (and probably are even working on it). Can't Wait!
Honestly, for some who spends thousands on Apple hardware every couple 2-3 years (and I'm not alone), I don't mind spend $129 every fall to have an even better Mac. To me, I wouldn't care if they continued the trend as long as the software was always full of great new innovation. If the updates just became boring on the features, I would probably get annoyed and only update when it got interesting again. However, since Jobs has been back, Apple has been anything but boring.