Re-work your entire UI strategy in Windows. Seriously, do so now. And do so in all of your desktop app groups (except Office, they seem to be doing okay).

Why? Because they're too risk-averse, and willing to let really horrific UI slide - and as your customer demographic has demonstrated in recent years, they will buy into good UI and positive experiences in droves. They will line up for a week before release to get their hands on a UI that works... and MS doesn't have UI that works.

Look at things like the system tray - a terrible idea that everyone realized was a terrible idea back in 1998. 12 years later, it's still there and as bad as ever - this is a textbook case of MS being too afraid to pull the plug on a feature that frustrates its users every moment of every day. I'm not sure what kind of horrific fury had to be leveraged to get the Office team to do their (IMHO, very awesome) redesign, but the same thing needs to happen to Windows, and it needs to happen right the hell now.

If you need a good example of someone at MS who knows good UI, consult the Xbox team. These are the same guys who took a perfectly good UI (the original blade interface), threw it out, and implemented something much better, and were not afraid of stepping on some toes to do it. MS needs this spirit back in its UI development, across the board. Substandard UI should not be accepted at all, and there needs to be some centralized oversight into the user experience. The quality of UI, or hell, even the basic layout of UI, across the entirety of Windows is so marvelously inconsistent it's a wonder people can navigate your OS at all. Compare with MacOS X, where Apple has gone to great pains in the last 2 years to bring all the disjointed bits all back under the same banner, and unify the experience to something much more consistent and usable. MS needs the same.

Further, your entire approach to the touch market is broken. The multitouch functionality in Win7 is laughable. Your company has correctly surmised recently that the touch market is going to be a crucial one in your battle for the consumer OS market - but you're not going to win it (you're not even going to be an also-ran) if you keep concentrating on inconsequential, completely useless bits like multitouch scrolling. You need a version of Windows that is completely overhauled, UI-wise, for the touch device. It is completely insufficient to touch-enable your existing tiny buttons, make no significant changes to the main Windows UI, and call it a day. The way people interact with a touch device is completely different from how they use a desktop computer - Apple has realized this, and MS needs to realize this as well. There should not be "Win7, now with multitouch", there ought to be "Windows Touch" - a completely different user experience, leveraging the same technologies.

I'm not terribly qualified to speak on the enterprise market MS is dominating, but you guys are losing badly in the consumer space in every segment except video gaming. The Xbox team moves quickly, and they execute really well to critical and user acclaim - MS would be well served to study what has made that part of the company so successful, and the rest of their consumer products such utter failures.