It has been asked several times which language is better for a test developer at Microsoft, C# or C++?  The answer really depends on what group you will be working in.  Different groups require different skills.  It is my perception that C++ is by far the dominant language today but that will not always be the case.  I have friends that are SDE/Ts who work exclusively in C#.  I'm sure there are some on the VB.Net team who do all of their work in VB.  There are probably some on the Office team who use VBA for most of their work.

For now most things are being written in C++ because of the extra runtime speed and the availability of libraries and APIs in the language.  In theory C# could become as fast as or faster than C++.  It has the ability to dynamically compile and thus take advantage of processor and system features not available to the least-common-denominator approach of a traditional compiler.  Most likely, in the real world, it will never quite catch up.  The C# team is working hard to minimize the difference between the two.  See Rico Mariani’s blog for some posts on the subject.

This isn't to say that C# won't become the dominant language though.  Hand-tuned assembly is often faster than C code and C code can be faster than C++.  Those advantages didn't stop C++ from becoming the dominant language, however.  Why is that?  It is because C++ is faster to code in.  It offers native support for object-oriented coding and abstract data types.  These increase the efficiency of the programmer.  This increase in efficiency is accepted at the price of code that runs a bit slower.  C# offers a similar bargain.  Coding efficiency is up but performance is down.  As processors continue to increase in speed, the need for that extra ounce of speed will be less and less advantageous and the increased coding efficiency relatively a greater and greater advantage.  When the APIs for coding Windows applications become managed with Avalon and WinFX, the usefulness of C# will be magnified.

Over the long term, I expect that C# will become a dominant language.  Will it fully displace C++?  That is hard to say.  Certainly not in the near term.

I must end this by saying that I am no expert on C#.  I've done some coding in it but nothing too serious.  There are others on blogs.msdn.com that know a lot more about the subject.