Maybe it is sorta working. Windows 7, Office 2010, Kinect are all solid products.

Microsoft still is kind of odd about actually competing in the Tablet and Phone space. Plus they are still slow moving. Essential updates to services and products are months or a year out when they are needed in weeks. Office Webapps will probably still remain largely unused due to its clunky and confusing nature (almost all my peers are on google docs because it is easier to manage permissions, the .net passport thing just doesn't seem to work right ... )

Seeing leadership change certainly isn't a bad sign, especially if their replacement is serious and ready to compete.