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Microsoft isn't dying, but they aren't quite the force they once were, and that's a good thing. Forces them to come up with some actual new solutions and innovate a bit.

Unfortunately I feel their attempts to FORCE FEED consumers Vista will hurt them more in the long run than anything else they've done recently. Consumer demand for Vista is QUITE low and people have been going out of their way to find the rare new PC with XP installed instead of Vista.(Or even WORSE for Microsoft, people buying Macs or installing Ubuntu and being done with it)

I doubt the whole HD-DVD fiasco hurt them as much as it hurt Toshiba anyway...