Just like you said, Office, and we need a tablet that install Office. We don't want people move away from Office because they don't have it for tablet and go and start migrating to other format. It doesn't have to be a heavy duty as Desktop Office, but, people want to present PPT with it, people want to show Excel in a conference, and they are ok with less functionalities as long as the files can be used interchangbily on different OS.
Like I said, start a new branch and merge it back. It is about choice. For the people who doesn't care about legacy apps, they will buy WinPhTablet. And they will find alternative apps that works well with fingers. And there is a gigantic market for those new apps that provides good solutions and experence without "virus, malware, spyware, evil unable to uninstall (Google Desktop and MSN), evil registery errors, decentralized update systems".
When Windows is upgraded with WinPhTablet experience 6 years after WinPhTablet launched, people will gladly use their WinPhTablet apps on their Windows.
Win95 drives the MS customer relations. That's how WinNT is relavent. That's how Office is relavent. Not WinNT and Office drives Win95. While the money is indeed from WinNT and Office, but, you cannot have those without proper advertisment and proper casual (non-business) customer perceptions.
My point is simple, people want a thin protable device where they can use their fingers and they want to easily explore/install/uninstall/upgate an random app without fear to all the things that happened on non-managed space. I don't care how MS is going to address this, but, the demand has to be made or the people will just buy competitor's offering. Once they switch, you can kiss them goodbie. Once 50% of teens use it, you can also kiss your Windows Home edition goodbie.