the Guitar Hero and Madden ads, which prominently displayed the Xbox360 logo and managed to help secure the Xbox360 as THE Madden-system of choice for the generation; the system bundles with third party software such as Marvel: Ultimate Alliance, and even this recent public event in Japan:
This is not unique to Microsoft. It's a common marketing technique. Intel does it with Dell and other companies all of the time. The idea is that Microsoft provides marketing money to publishers to split advertising costs for their big-name games, and those publishers also advertise the 360 in their commercial. This way, both Microsoft and Activision (or whoever) get their products advertised in the same 15 or 30 second slot, and they split the cost. That's the nice way of looking at it.
Money talks. Microsoft has a lot of 'advertising' money waiting to be spent and they'll spend it in the most aggressive way possible.
You've found something of a truism in the industry right now, however. Microsoft is one of the greatest marketing companies in existence. This has been true since the first Windows release where Microsoft managed to market it to everyone wishing to sell cheap home computers. And that was the emergence of the home PC for most people.
Microsoft isn't about innovation or quality. They never have been. They've always been about taking an idea that someone else had, copying it, and marketing it better than that other company. When MS and Apple copied Xerox to create Windowing operating systems, Apple did it better. But Microsoft marketed it better. This has been true, more or less, throughout Microsoft's existence.
I agree. I think their other big success is that they've managed PR their way through the image that they garnered from Windows - I think especially this generation, fewer people think of the 360 as as much of a product of an arrogant behemoth with way more money than scruples.
You could argue the exact opposite when you consider the 360's outrageous failure rate and Microsoft's very casual "we'll fix your 360 on our own time and send you someone else's repaired 360 in another three weeks" approach to supporting their defective product.