I love playing Microsoft apologist!

1) The fundamental workings of the software business are pretty much unchanged since they were created by MSFT back in the day: It's relatively cheap to develop something worth a lot of money. As far as service and maintenance goes, I'd say Microsoft on average is pretty good about both. They are absolutely the kings of hot-fixes/service packs and absolutely the kings of keeping backwards compatibility wherever possible, which is about all you can ask for.

2) Let's not pretend like Internet Explorer wasn't a huge product for Microsoft (and the world). There's nothing worth arguing there. As for the web 2.0 stuff, Microsoft has demonstrated that it's not going to be a pioneer here (and it isn't in many businesses, actually). That said, they're making money from their search product, and MSN/Live.com is still quite popular. I don't know what metrics you want to judge Microsoft by here, but if they're behind it's not to the point of death. Especially since we still haven't seen any billion-dollar ideas out of web 2.0 (short of ad platform stuff a la Google, whic MSFT is copying).

3) When has Microsoft really had that many friends in the first place? They run a business that's especially large, so they'll be stepping on toes all over the place. I'm not entirely sure how this points to their ultimate demise, so long as they're still making more money than the competition is... (That means they're winning)

4) You only need one cash cow (ask Google). Microsoft has two clear clear money winners. The rest of the products are ultimately investments more than anything, but I'll go one by one just for fun. MSN is indeed taking over web search share recently, and has always had a super popular destination page and email. The Zune didn't beat the iPod, but neither is anything else. For a first try, the Zune actually didn't suck too hard. Microsoft is working their way into the consumer entertainment space here, though, is the real point. The surface computer isn't a real product, so I don't think anyone's bought it. MS research kicks out a lot of stuff that's just worth thinking about, not worth making. IIS is a pretty popular web server. It's not free though, so Apache makes for pretty tough competition. Ultimately, IIS is more a part of MS's entire web stack, and so if you buy into that, you're giving MSFT a lot of money, which is good, even if it's not #1. The Xbox, again, is a consumer entertainment play, and the Xbox 360's killing it in the US console market. Microsoft has a lot of money, and they throw it around. You don't have to win markets to make money, and they know that fact well.

5) It's way too early to tell for sure, but if XP's launch is any basis for comparison, Vista has some great years ahead. We'll see how the Vista hate keeps up when people realize it's, like XP is now, the standard OS everyone's running. Even if Mac OS tripled up, its share would still be basically irrelevant to MSFT's bottom line.

6) Compare Microsoft's stock price to Ford's over the last few years. Both companies are such long-standing giants that there's no excitement to be had in trading the stock. If you don't buy that, you could at least accept that if confidence in Microsoft were tanking, the stock would be too. It's actually up 10% on the year.

7) PC makers aren't turning their backs on Microsoft. They're trying to pick up some sales from the Microsoft haters (who they would prefer not also become Dell haters by association). Dell is gaining customers with the deal, and Microsoft's not losing any (since Dell buys the licenses, not the buyer). This is as much of a non-point as the rest.