It still amazes me that Microsoft is the king of the software industry, a giant with an enormous wealth of resources at its disposal, and yet it simply cannot compete with the vision of smaller, younger companies.
Everything that Microsoft does these days has been done first, and better. That's not to say that it couldn't pull it off; not at all. Microsoft has the talent, or at least the money to get the talent, to make some really incredible stuff, and yet they keep fucking up, and not doing anything right. XP is still, unfortunately, the best OS they've put out so far, Vista being awful and Windows 7 nothing special. They cannot even manage to keep releasing new *improved* OS's time after time, let alone innovate or drive the industry forward. It would be incredible to see a competent Microsoft once more, but I really don't see that happening, for the time being, at least. :S
/edit
Well, I do like the Xbox, so I suppose that it's not all bad.