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Microsoft are a good thing. Rather than there being 108123079126307123 different bits of software you need to do a damned task, you can just get a microsoft system, and they'll give you everything you need, that works with most computers in the world. MS Windows, MS Office, IE, etc. etc.
So many MS users get hacked because hackers design malicious programmes for it, because it will affect the greater number of people. If the situations were reversed there would be a similar number of viruses etc on linux.
Erm, XP is a very good OS, and very stable. Previous generations have been poor if a day went by without a crash on Win 98 it would have been a suprise but XP has crashed only a handful of times for me. If a program locks up, the OS is still there to sort it out.
We have mostly moved on from the issues of bundling software now. To expect an OS to ship without a media player or browser is akin to it shipping without a calculator, or a text reader; they have become integral parts of an OS.
As a previous poster pointed out there are significant network externalities (one fax machine in the world is of little use, two are helpful and one billion very useful) from having such a dominant company it is much easier to train people and transfer files etc.
That said, they do need to be regulated, the IT industry is one of the most competitive and innovative markets - as long as that continues, a dominant Microsoft isn't such a big problem.