Name another console that will support 256 player online shooter.

surely thats only and only, purely because of a near 15 month head start in the field? if i can remeber correctly it was 6,5000,000 lead earlier on which has now come down.

and over the coarse of 2009 will continue to come down.

Microsoft is innovating in the field of Online, and what it offers.

I did talk about their online offerings, and I disagree that bringing gimped online to consoles compared to PC games is innovation.  It's just bringing a service into a new market.  It's a good thing, but it is more of the copy and paste technique that Microsoft tends to apply to all areas in which they work.

Are avatars a rip off? Yes. But Mii's are a ripoff (or should I say, furthering) of the Gamercard system that Microsoft developed.

Miis are a rip off of gamercards?  That's a stretch -- most people wouldn't even consider the two similar.  Further, the Gamercard is not even close to unique or the first of its kind.

And what new is Sony giving us? Microsoft isn't fielding the first party studios like Sony or Nintendo is. And I agree fully that this is hurting innovation.

It looks like you answered your own question here.  Microsoft isn't fielding gaming innovation like Sony and Nintendo because they don't control much development.  Given that Viva Pinata is a good step in the right direction, there isn't much less.

Turn 10, Bizzarre, Bungie, Lionhead and Rare are putting out have been pretty good - not as large as the cataloge of Sony, but equal or exceeding in quality. Neither has anything near Nintendo though. Your In the Movies and Lips seem to be very good innovative additions to their casual branch.

I'll agree that Turn 10 and Rare are doing good work.  Bungie has a relationship with Microsoft, as other third parites do, but are otherwise unaffiliated.  And I don't appreciate their work all that much.  For me, Halo 3 is just another online shooter although with a bad framerate at times (even with only 8 players). 

The problem is that good work is not innovation, which seems to be the point I made that you dispute.

And say what you will, Microsoft is the soul innovator in terms of Digital Distribution. No service has anywhere near the length or breadth of Xbox Live Arcade's unique IPs. This month alone, Xbox 360 Live gamers have received Braid, Geometry Wars, Bionic Commando, Galga Legions and Castle Crashers. What exactly did PSN or WiiWare get this month?

It's not innovation, it's a service brought to consoles.  And it is a service that other companies were planning on bringing to consoles for a while -- Microsoft just beat them to the punch.  Digital distribution is something Microsoft was beat to a million times over in the world.  It just so happens that there are only 3 players in the console market, so beating the other two when you release your console a year earlier doesn't equate to innovation, it equates to bringing a service that everyone knew would come to consoles eventually before your competitors do.

Again, nothing innovative there. Just a known-and-true technology that was started by MS competitors in areas outside of home consoles.

And if you look at this generation, Microsoft has been doing a stellar job at destroying the Shooterbox definition the Xbox was known for. Microsoft's 360 has the most robust cataloge of RPGs, Sports, FPS, and RTS games of any console. This if a far cry from what they did just 4 years ago. You can argue their lack of first party titles, but you cannot deny they've done a spectacular job of not only stealing Sony exclusives, but ensuring that every 3rd party game comes out on their system - something that neither Nintendo or Sony bother with.

I agree with you.  There's a lot of improvement compared to last generation.

In 2008, sales have taken a turn for the worse when compared to the PS3.

How have X360's sales taken a turn for the worse? They are up 57% from last year in the same period of time. Lets look at actual numbers, which is something you didn't do:

Read the bolded, underlined part of my quote.  Sony is doing better, Nintendo is doing better.  They're both selling more additional units than Microsoft when compared to last year.  You're taking my quote, cutting part of it out, then saying I said something which I did not say.  If you quote me, please quote me honestly.

The X360 still has a 5,500,000 unit lead, and that's a very hard thing to argue.

You seem to make it sound like I'm only attacking Microsoft.  I did outline where I thought they were doing well, and I did that first.  I'm not arguing against the idea that they're ahead of the PS3, I'm simply suggesting that Microsoft is losing that lead this year very rapidly.  You mention Microsoft's biggest region, but you should at least admit that there is only one region where the 360 is doing well, and now that Sony and Nintendo are both outselling the 360 this year it looks very bad.  It should certainly be beating the PS3 in America.

surely thats only and only, purely because of a near 15 month head start in the field? if i can remeber correctly it was 6,5000,000 lead earlier on which has now come down.

and over the coarse of 2009 will continue to come down.