I partially agree Microsoft does have a weird problem where they have more than one product to do the same job,
Windows Media Player, The Zune Desktop Software, Windows Media Center on the desktop all for playing content on one's desktop
Play for sure and Zune's DRM for Digital Rights Management on Portable Players
Windows Live Sync, Mesh and Skydrive. All provide overlapping "cloud" storage syncing that should be merged together.
IE 6, IE 7, and IE8.. oh wait that one is a joke
But When it comes to getting Media Center on a TV the experience is less than optimal, you have 2 options
Media Center Extenders(including Xbox 360), I have tried on a few occasions to get my Xbox functional as one of these it works decently, but i kept running into issues because my home network is bad, and I have no control to fix the network. Essentially the issue was that each time I reconnected to my PC running WMC it would see it as a new computer and try to get me to re-register the device, which then in turn had to recreate the local cache of the desktops media library, which took too long to be convenient. Eventually I switched over to using another media streamer that worked with the Xbox that did not have to do registration and caching.
Roll your own Windows Media Center HTPC
Great in theory much better than using the extender.. not for the general population). The only other Media Center software,that i can think of, that can rip live TV is MythBox. Although personally if XBMC had this capability then it would be my preferred option.
As for what this new device sounds like from this article is the second option all in a self contained box, which is great if it retained it PVR functionality and is able to stream from local network computers (it probably will use home groups but that is a small price to pay). What I hope does not happen for this is removal of user addable codec. It is windows CE based so it will be ARM based as well which means some codec will need to be ported but still better than nothing.
If this is done right it should fill a demand that is not being met by their 2 other products which are meant to be working together.
it would also be wise to price it close to the Boxee, Apple TV and other products of the like. I will be willing to pay more only if it has PVR capability which in theory would mean not an additional box but rather just replacing a box, and is also not being done by any other consumer device that attempts to merge the Web with TV.