I like the idea of Microsoft merging Adobe. Stop looking at it as becoming part of the Office suite and think about it in the other direction.
I think Adobe could make KILLER new versions of Word, PowerPoint, and Visual Basic. Microsoft NEEDS them. To me, they've always failed in making things like Publisher and Works, and Microsoft Paint has never changed since Windows 3.1. Heck, A LOT of their basic programs work almost the same way as they did in 3.1.
At the same time, I hope they come together to make a personal CS suite. Photoshop, a more iWeb-like Dreamweaver, and InDesign. I see so many poorly designed websites out there and I know that it's something that's WAY overdue. Bundle it up with a newly designed Office too. Charge $100 and you'll have a winner. Keep the other CS suites as they are, just add this to the lineup.
I LOVE iWork, although I wish Pages worked more like InDesign and you could move stuff more freely. Although, you could probably use Keynote for that.