"through a middle-of-the-road approach"
Welcome to the so-so
Its amazing how Ballmer hasn't brought anything new to his continued speculations about where the industry is going and what microsofts part will be, this is wearing thinner and thinner every time he speaks.
Anyone can see Apple is growing in popularity and they have ambitious plans which will grant them an important role in the future of IT. Especially with leopard server offering a better experience than 2003 with better features right out of the box. (Caldav, backup, anti-spam, anti-virus all inclusive!) Apple it seems are also breaking into the smartphone market with some success, a couple of generations time they'll have it sewn up, just like digital music players.
Linux will always remain in the server market, and will always have new deployments in every crack it'll fit into, Linux is like a fungus in the server market it grows into the smallest crevice, if you want a server now, install Linux, 20 mins you're up and running. Linux on the desktop is growing too ubuntu is massively popular and growing every day.
So whereabouts in this evolving market does microsoft sit?
Charging customers for software, and software services, while providing a middle of the road quality product which has a total cost larger than the rivals.
Not much of a change then.