Clarification
Every piece of Microsoft hardware I've owned has been flawless, including Xbox 360, various MS Mice over the years, MCE Remote, Sidewinder. (never had a Microsoft keyboard, but then I'm a 2 finger typist, but even then I expect they've got a high MTBF per key).
If what Adam T quotes is correct, then it's hardly Microsoft's fault surely? You design a processor then subcontract that to a massive chip foundry and they fuck it up. At least Microsoft did the honourable thing and replaced them all.
Did you mean the Rio Karma? Unfortunately, when I picked up the Zen Touch for the knock-down price of £85, the Karma was no longer on sale. I looked at that and the Cowon.
For the record, Microsoft owns the OS market due to good business acumen and the fact that Apple were too stubborn to reduce the price of the Macintosh accordingly. This is why William Gates III had to allegedly bail them out with large cheques periodically to avoid a dust-up with the Monopolies Commission. The world is yours for the taking, Bill Gates just did exactly that. He's also now benevolent enough to give a lot back to the world.
http://www.wired.com/gadgets/mac/commentary/cultofmac/2006/01/70072