First they need a working version past XP
I had a computer once running MS-DOS 6.22. I upgraded to Windows 3.11, no problem, From there to 95, then 98 2nd version, then 2000, then XP.
No reinstalls. Used Norton Ghost when I needed a bigger hard drive. Worked fine all along.
Then I installed Windows 7, which not only can't port installs from XP, but can't be upgraded from 32-bit to 64-bit without another full install. (I don't know why, Microsoft figured out how to upgrade 16-bit to 32-bit perfectly fine.) It's already (10 months after install) getting undefined "inconsistencies" in its registry, telling me I need to reinstall the whole thing over and all apps.
First Microsoft needs to get an operating system past XP that actually works. Vista and 7 just don't cut it. If they want to sell upgraded OS's, then provide ways to fix inconsistencies (if they know there's an inconsistency then they should be able to provide a report on what's conflicting), and provide a direct upgrade path without reinstalling everything all over again.