As far as I can see, the biggest thing working against MS here is simplicity. The ipod is extremely simple to use, and load songs onto (for those people who are less tech-savvy than the average reader of slashdot), I can't see MS (or anyone else for that matter) being able to produce something as elegant and easy to use as Apple's wheel. Until they can market their mp3 player as being as easy to use as an ipod, I can't see anyone being a real competitor to Apple, even given the ipod's current "failings" (screen size etc).