On Wall St perception is everything
It doesn't matter what OS is technically superior. It doesn't even matter what people prefer to use.
Vista is the first time that average people have become aware of an actual OS, and not for a good reason. Most share holders are likely aware that **they** spent $5bn and many years developing a product and the people wanted to buy the previous version. That doesn't look good.
What matters here is how the the shareholders perceive things, because they're the ones who will ultimately give Ballmer the nod or the boot.
Before Ballmer, Microsoft could do no wrong. Microsoft = Windows = Computers as far as average punters go and Microsoft was Big Profit and the only thing limiting what Microsoft could do was DOJ action. That stopped in 2001 or so, and since then MSFT has gone down in value and MSFT has not done anything that looks new, exciting or profitable.
Sure, much of that is due to maturity. As a company grows and matures, it cannot keep up exponential growth. But the foot does look like it came off the gas in about 2001.
The only benchmark investors really care about is how their money would have performed if they'd invested elsewhere. Since 2004, MSFT is down a bit, AAPL is up1200% and GOOG 360%
When stuff goes right, you can be forgiven a shopping list of sins. When stuff goes wrong, people start looking for a length of rope. If Ballmer had laughed off iphone and still made Apple-like returns, he'd have been forgiven. He didn't. Everything has fallen apart on his watch.
A once great brand has eroded to almost zero.
To keep his job, Ballmer needs to show something positive. He'd better come up with a better story than "investors, investors, investors..."