Shame, he's a bright bloke and has proved himself a good manager, but no real surprise as Watford's results have been dreadful for over a year now. I'm sure he'll be back.
Wouldn't know if this is the case here but some managers are ok when things are going well but a REALLY good manager is one who can pull things around when the going get's tough.
Peter Taylor's a fine example of the former and, if MA can really turn things around long term then that's why he will be the better manager.