> Microsoft is a walking disaster currently.
The problem is perspective. The types of people that spend time on HN don't spend time in the real world, where the current state of affairs is very different from what we think it is. Apple gets a lot of hype, and no doubt the iPhone is very successful (because it was a new type of product), but the iPad is no more than than a glorified toy. Once Windows 8 tablets are released and become commonplace, the iPad will stand no chance. The ability to use the same device for casual consumption and for productivity cannot be understated. Try getting out of San Fran for a few days, and you'll start to understand what I'm talking about. There was a similar issue with Android a few years ago, but it seems even the most hardcore iOS fanboys (such as Marco Arment) have finally gotten on the Android train.
And don't forget about the TV. The iTV simply will not sell, because people are not going to throw out their existing TVs just so they can get the latest shiny toy from Cupertino. OTOH, MS has huge market- and mind-share in the form of the Xbox 360 (which has been the best-selling console for more than a year). You can already watch Netflix and HBO GO on it, and Amazon Instant support has just been added. Kinect has proven extremely successful, and with Project Glass, all kinds of new mashups are going to become realizable.
> I'm sure your imagination of a Windows 8 tablet is vastly superior to an actual real-world iPad.
Have you been living under a rock? Windows 8 is coming out this October. Several consumer previews have already been released, and hardware has been demoed. Windows 8 tablets are much more of a real entity than you seem to think.