I'm not privy to the market research to comment on the disco stores, but such loud outlets will undoubtedly draw much needed attention to the platform.
Back in the 90s people used to say that Microsoft was a master at marketing mediocre software - I couldn't see it then and I definitely don't see it now. I think they let great products just die like they forgot to lift the lid and let some oxygen in. Lucky Xbox seemed to have a different team employed.
The phone is a great example of this. It's taken Nokia's publicised downfall and subsequent rebirth to bring it to the attention of people on the street.
I often show people amazing MS products they've never seen, or never would have if they didn't have a friendly programmer to show them, like Photosynth.
Microsoft finally have shops, at least in Seattle, which is hopefully the start of a new era. Sometimes I get the feeling that there are some old heavyweights deep in the management structure in Redmond that hold the company back.
P.S. Laura, maybe it was the jet lag but watch the folded arms, girl!