I think the guys did deliver for the most part when it comes to gaming (Red Ring of Death aside :D). They did a good job with the original XBOX and now with the XBOX 360, housing a good deal of obscure but very good games with the former (very PC-like), learning from their mistakes and creating an excellent system with a good game library with the latter, capable of challenging the Sony behemoth, although I'm concerned Microsoft's huge paychecks are getting too much in the way as lately.
Also, they played a role in the often missed Dreamcast (*sob*), and they published excellent 2nd and 3rd party games under the Microsoft Game Studios label for the PC: Age of Empires, Dungeon Siege, Crimson Skies, Freelancer, Rallisport Challenge, Rise of Nations...
Apart from that, it's commendable (up to some point) that in recent times they have been able to adapt to a fast-changing market, as well as listening to the customers and trying to fix their bigger errors. Of course, it's questionable up to what point Microsoft's own initiatives play a part compared to the looming presence of the competition waiting for them to take advantage of every mistake they commit.
And they bought Sysinternals (along other important companies). Yeah, that was a good move :D