Why should MS be desperate? They are winning against Sony right now. No matter how this generation ends, Nintendo and MS will be the winner and Sony the loser. Even if the PS3 surpass the Xbox360, which is unlikely, MS still wins, regarding where both companies came from. Nintendo is out of reach for both.
For the past year 2008 Windows Mobile had a market share of 11.8%, while Apple had 8.2%. Nokia rules with 52,4%. That is not that bad, considering that MS never build a phone.
So why should MS be desperate? I don't get why people try to say MS is doomed. To me, they seem to have a very nice future.
Windows 7 had a great feedback so far, the beta was a success. Xbox Live and Video on Demand is getting bigger and bigger, Windows Live Messenger is very successful etc. Actually, there is no product that is not successful, except the zune :D