Defending Microsoft here can only make things worse.
It isn't bad enough that MS sell OS that still looks so early '90 on the desktop. C'mon, guys, give me a year, I'll make good spiffy interface. HTC proved that. Isn't a shame that we need some hardware company to fix software shortcomings?
IE 6 code base is now a big news. Don't let me started on that.
Win32 programming model. On a mobile device. Ok, it was nice ten years ago, to give the developers some head start, but today, guys, seriously - we seen that you know how to make some good framework work with WPF (ok, there's some performance work needed, but still), where's something similar for the mobile phone? Some all-around .NET framework that isn't just a bleach copy of WinForms? Something actually built with idea to make developing things for the mobile phone, you know, fun and easy to use (Android SDK, I'm looking at you - how many steps it takes on Windows Mobile to replace the default dialer, for example? Or to fetch contact list? Or to be notified when the next SMS arrives?)?
Etc, etc... if it's some other company, I'll probably say "but it's a big task, to re-invent the whole platform". But we're talking about Microsoft. THE software company. If MS doesn't have enough warm bodies to throw at the problem, who does? I suspect that we have not body count problem, but motivation problem - Palm is buried, Symbian is more or less crap, someone from the management told to developers "ok, we're done here". Well, guys, prepare for some serious butt-kick-awakening: you got some slack from Apple's idiotic NDA behavior, but I doubt that they will wait forever to put their act together, and Android seems very, very promising (I didn't touch the phone, of course, but SDK looks much more serious than current WM am-I-mobile-device-or-something-that-pretends-to-be-a-small-desktop)