re: innovation
Yeah, your right, the Kinect is a wonderful device. As far as their tabletop device (surface), the latest version seems promising; it's now thin enough to hang on a wall and you can use it for things like scanning coupons.
I still think it will be interesting how they further innovate over the coming years because of the shake down and how it changes the feel of the company.
Like you said MS has not primarily been an innovative company though and where it has tried to innovate it hasn't always been.