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Show them a great IDE setup, and utilize some of the great window-managers that are available. Show them that Linux is totally customizable, and a great productivity environment.
I don't know about IDEs, because they're in love with Visual Studio, perhaps the best IDE out there. :) They were impressed by KDE's wobbly windows, all those compiz/KDE effects (especially the cube and cover switch), and tiling window managers like dwm and xmonad, as well as the sheer modularity and customizability of those DEs/WMs, but they don't really care so much about pretty desktops, multiple workspaces, or customizability. I would have shown them the real linux killerapps, such as the linux terminals and the different package managers, the build systems, etc. but they weren't big fans of the terminals, telling me that I am stuck in the 80s with 'DOS'. :(
Perhaps the best thing to show them is an efficient Linux workflow. This would of course depend on whom you are trying to impress. I think that because Linux is so customizable, the only way to impress the general public would be with GUI effects or the like, as you mentioned. Linux-as-a-whole is more of an abstract concept to sell than Mac OS or Windows, because it is not one operating system, but a whole universe of free and constantly evolving distributions which share some common foundation, namely, the kernel. What beats a Live CD for cheap thrills? Beats me, I'm still impressed. I've used them to help people recover seemingly lost data, and take my software on the go. Killer question! I hope more people add suggestions, as I'm always looking for new recruiting tools :)