The sad thing is Microsoft could succeed so wonderfully here, but the reality is almost certainly they won't.
Create a stripped down, simple OS based on Windows (even iOS is derived from OSX), create a compelling app store, and a framework for writing apps for it based on Silverlight. Bam! Very compelling piece of hardware. Not only that but these type of apps are what Silverlight was destined for. I'd much rather write these types of apps in Silverlight than Cocoa Touch.
Create a stripped down, simple OS based on Windows (even iOS is derived from OSX), create a compelling app store, and a framework for writing apps for it based on Silverlight. Bam! Very compelling piece of hardware. Not only that but these type of apps are what Silverlight was destined for. I'd much rather write these types of apps in Silverlight than Cocoa Touch.