Their latest stunt is suing they major real competitor-the Open Source community. The problem here is that Microsoft has a long history of questionable technical practices that would come out in any serious investigation.
The thing is, this company can't compete in a more even playing field. The Open Source community is starting to move seriously into the desktop with MIT's OLPC initiative-and this is a serious potential threat to Microsoft.
The apparent way for the company to maintain its de facto monopoly-and continue the lifestyle to which they have become accustomed is to play politics and get laws and judicial rulings in their favor. The problem is that they have expended considerable political capital defending H-1b expansion which is most hated among the US technical community. A lot of talented engineers would quite literally love to see Microsoft go the way of DEC.
Also, Microsoft was until the 2004 election cycle a company that heavily donated to Republican candidates. There have been some attempt to weight donations to Democrats, but frankly, they'll need to apply a lot more money to buy any love from that direction—and instead they are moving in the opposite direction.
Leaders of the left wing of the Democratic party like Dennis Kucinich look very favorably on Open Source Software, and increasingly, it is becoming politically untenable for Democrats to support H-1b visas, as the election of James Webb shows.
Personally, I plan on buying an XO machine as soon as they become available in the US. I would really like to avoid any association with management that has assaulted my family's livelihood—and that of many of my friends—as Microsoft has.