And why does she understand it? Probably because you explained it to her. "Windows RT" is the dumbest product name in history of industrialized products. Even something like "Microsoft Tiles" would be far better.
What does RT mean? I guess it has something to do with WinRT, but who the hell knows that outside of Visual Studio addicts? For 99.9% of the population it is a completely meaningless moniker. Windows XP and Windows me also had these two-character names instead of a number and they were able to run all existing programs.
That has also been pointed out a million times in the last months, Sinofsky even said that they were going to make it absolutely clear that no one would confuse Win8 and RT.. and what's the result? Windows RT looks exactly like Windows 8, it even has a desktop.. but it can't run existing applications, and the only hint for that is "RT", which doesn't ring any bells for the customer. You could as well call it Windows Dumbo.
I bet that there were more than enough RT device buyers who were absolutely befuddled why they weren't able to run their existing Windows programs and gave the devices back.
Customer: "Why can't I run my existing applications?"
Salesperson :"You can't run these on Windows RT. Only the store apps"
C: "So why is it called Windows? And why is there a desktop then, that looks like Windows 7?"
S: "To run Office"
C: "But isn't Office a normal Windows application as well? I have it on my PC, and it looks exactly like the one on this device. If Office works on this, why can't I use my other programs as well?"
S: "You see, this thing has a so-called ARM processor, and Microsoft has decided that [...]"
C: "Ah, * this!"
"rumors of astronomical [Surface RT] return rates" - Uh, let me guess why.
The stupid approach taken with Windows RT is also bad on a whole other level. It shows that Microsoft doesn't seem to value its own ecosystem, which it has been building up for the whole existence of Windows. Microsoft opinion about the millions of existing Win32 and .NET applications, and the developers who made them, is not exactly flattering if they thought that no one would notice their absence.
The Windows 8 decisions so far reek "debacle", from start to finish. And Microsoft can't say that they haven't been warned. How were they able to stubbornly screw up so much on all fronts, despite the tons of feedback and complaints, which predicted all these problems to the letter, is beyond me.