You are so right.
Look at the photos over at the archos website and see that it's all about the OS and the hardware, the end user can go to hell. Who (at MS) cares about the user experience so long as it runs Windows 7?
For MS it's all about the Brand and the juggernaut of sales, keep the user swamped and he won't be able to move away, while others are concentrating on the user experience: Treat the user with respect and he'll be faithful.
Apple, Nokia and Palm are all coming to realise that if you get the user experience right, then the users will stay faithful. MS are still trying to use beatings and negative reinforcement to demand brand loyalty.
So, you know what MS should do? (I know I will get flamed for this, but it would work). They should draw a line under Windows 7 and say, after that we will have a brand new operating system. It will not be backwards compatible, though it will work on the same hardware. It will be new from the very bare bones upwards, it will not be based on any previous version of windows, and it will not be called windows.
Now, I know all you windows fans will be snigger at how stupid that sounds, but is it really? Is it any worse than someone who decides to switch from WIndows to Linux? Or windows to Mac OS X?
You are all crying out about how there will be no support for you favourite this that or the next app, but the developers will love it, they get to re-factor all their products, which they've been secretly wanting to do for years. Anyone who has ever made Mac software has already done that once, and it pays.