More pies than fingers
You definately touched on this multiple times. I think that M$ has tried to put it's fingers in too many pies. Instead of trying to make everything I think they should fund new companies to take on new products. For example, let's take the Zune. The Zune could be made by a completely different company with different management. You could actually have customer support (Something that M$ has never done). The money could come from M$ but then they need to walk away.
I am talking about spin-offs. M$ should stick to Windows and focus 100% on it. Spin off every other division in to different companies and let them sink or swim. This will allow for the diversity required to maintain and support a larger number of products. It would also take the M$ name off of other ventures with all the benefits that could bring.