For one, it's fucking called Windows Phone 7. Glad Microsoft didn't call the XBox the Microsoft Windows Game Box. I also wonder how much of Android's success in the US can be atributed to Verizon's Droid branding.
Secondly, Microsoft can't seem to sell coolness. Every laymen knows about the latest hot Android or iPhone, but few know about a cool WP7 phone. You don't have celebrities selling WP7 phones. Once again, look at Verizon and Droid.
And lastly, WP7 has very poor carrier support. Walk into any store and you'll have Android phones lining the walls with maybe one or two WP7 phones in some corner somewhere. Microsoft needs to convince/pay the carriers to support their devices as first class citizens. Verizon and Android is another great example. Or MS can pull a play from Apple's play book and sell from their own retail stores.