Microsoft has studied the TV/ PC/Communications convergence space for several (four plus?) years. The company understands the magnitude of the issues. But, at the same time, they're still trying to improvise their end-to-end solution to the market. So far, Microsoft has learned a little humility about the inadequacy of their off-the-shelf stuff for the home, and they realize they are going to have to engage with a lot of partners in wide range of fields. Starting from this point, can a company that seems to be universally feared and disliked reposition itself as the guiding light, the developer and deliverer of standards for all the interfaces and interoperability that everyone needs?
Interoperability/convergence is an industry problem, not a hardware or software issue. Is Microsoft the company to be the leader, and if not, what company is? In truth, no one wants Microsoft to be the leader; to jam their vision and implementations down the throats of yet another industry. Alien NIH technologies that Microsoft doesn't control like JAVA, QT, OGL, Dolby, I2C and MPEG, etc. will be tolerated only until they can be squeezed out by Microsoft's versions of these technologies. For example, Corona squeezes out MPEG, WMA squeezes out QuickTime, WindowsBasic squeezes out JAVA, etc. All technologies will be assimilated and marginally reinvented by Microsoft as it subsumes and consumes the phone network/entertainment and automotive industries, aided and abetted by its allies from PC-land, who in their viral-like business model have to expand and continue growing or die. It may not be a pleasant prospect, yet there is no other company that is willing or able to take on such a leadership position.
Can Microsoft be stopped? Should Microsoft be stopped? No company is big enough to do anything except whine about how unfair Microsoft is and how they are monopolistic and how they crush competition. Only the government, an agency that makes snails and glaciers look like a rocket sleds, can thwart the Microsoft conquest of the home, and of the auto. But an administration fueled by political contributions will not, without enormous outcry from consumers (i.e., voters), really force the diffusion of control. One has but to look at the DTV and copy-protection silliness to judge how effective or contemporary the government could be.
So, assuming the Microsoft juggernaut cannot be stopped from pursuing its declared manifest destiny, all the other players like Sony, Motorola, Samsung and others can do is to try to be included and possibly influence the standards Microsoft will develop and impose during the next 20 years. And, though they are hardly democratic in their application and development, Microsoft has acknowledged that even they are not big enough or smart enough to do all and will have to engage partners; the master plan will be slightly diffused around the edges, just as an occupational army that takes over an alien country becomes integrated at its boundaries.
And there will still be small bands of rebel forces wandering through the brave new world of Microsoft home/ auto media control that will satisfy some users, and if they gain any success they will be assimilated and reinvented, so there will be richness in the world from the semi-incompatible islands of functions and solutions.
To succeed Microsoft has to overcome the inconsistent and unpredictable behavior of its software. Consumers, even computer-savvy consumers, won't be looking at a blank screen and murmuring it worked yesterday they'll get mad, and worse, they won't buy.