What Microsoft needs is a skunkworks. They need a team that operates outside the rules and regulations of the rest of the company to develop the next OS. Let’s face facts…Vista is going to be one of the worst Windows yet (I never tried ME, though).
Microsoft needs a skunkworks team to do what the Macintosh team did for Apple. Fly a pirate flag, innovate, and create a fresh OS that is not dragged down by backward compatability. Create the OS, create basic built-in applications (web browser, email client, news reader, IM client, file browser, media player, etc), and create tools to allow the community to easily create more applications.
Mac OS X is not dragged down by backward compatibility. Sure, they have it in the form of Rosetta (a kind of emulator) and Classic mode (emulator for older apps), but it doesn’t drag the OS down with it.
Mac OS X also makes the development tools available for free. This allows John Q. User to contribute to the community without a large cost (whereas Visual Studio is up near $3,000).
This skunkworks team needs to look 10-15 years ahead and make that OS a reality with current hardware. Build a stable foundation, a clean, easy to use interface, and let the community add to your product. Don’t spend years re-hashing old ideas, spend years making the foundation solid. Give up on backward compatability. Force users to move on past Win32 executables, but empower the community to create compatible software quickly, easily, and for a realistic amount of money. Grass roots is where it’s at nowadays. See Digg.com and Revision3. See Google. See Firefox.
Give me a totally new OS from the ground up. Something I can be proud to have on my PC. Something that is easy for normal users and powerful for power users. Move forward, cut the chains, and focus on quality, stability, speed, and the future.