It can be tough persuading people of the value of alloting time to consider the user experience of a software application during its development. There always seem to be so many other pressing things to consider - like just getting it to work.
But with products that have evolved over multiple releases the user experience increasingly becomes one of the most important differentiating aspects - partially because the importance of functionality reduces (most of the really useful features have already been added).
Do we really need more functionality from Microsoft Word? I'd gladly sacrifice much of its functionality for an improvement in its user experience.
Interestingly (and perhaps unsurprisingly given the competition from Apple and Microsoft's desire to dominate the digital living room) Vista makes 'User Experience' the top item on its list of features.
And it does seem that they've thought of some interesting ideas literally outside the box (or at least outside the laptop case). Check out Windows sideshow which allows a second smaller screen to be placed on a laptop for rapid access to the type of content (calendar info, etc.) you don't necessarily want to boot to get at...
As for the rest I guess we'll have to wait and see...