Advice needed: Working within legacy constraints

[Gideon Carstens]

The company I work for is a microsoft development house building
custom software solutions for large to enterprise sized companies. The
technologies range from typical old gray winforms to asp.net and some
silverlight(which I'm working on). The managers and PM's all have a
dev background but some of them are still a bit stuck in the lets-
write-80%-of-my-app-logic-in-sql mentality. So UI or UX for that
matter doesn't rank very high on the priority list.

Luckily our lead software architect is very much on the ball and he's
convinced the management that we should start looking into UCD/UX. I
expect that soon I'll be involved in doing some upfront designs and
user testing for of those gray winforms projects. That's actully
great, because it's a start in an industry that has been neglecting
the user for years now.

My main concern at this stage is whether I'll be able to create good
user experiences given that winforms out of the box is quite limited
(not exactly web 2.0 or whatever you want to call it). More so the
developers are more involved in just moving data around. ie. get data,
do some calculations on it, save data etc. They're not used to
building custom controls that work fundamentally differerent from the
stock standard controls.

I also know that a lot of those same projects reuse the same user
controls, wizards etc. Some of which their user base know by now, but
are atrocious for anyone else to use.

So where do I start? Do I take a more incremental approach (like Rian
does with Kalahari) ?
Do I pull rug out from underneath them and throw away their existing
reusable UI controls ?
I might be able to get a great design together, but should I keep
focus on the possibility that the developers might not have enough
time and/or skill to create a non-conventional control or layout ?

How would you approach it if you were in my shoes ?