I agree with everything Dwayne wrote except this word "concessions". Ever since Windows 95 at least, the platform has been conceived more as a marketing tool -- like television -- than as a piece of system software. There was never any question of "concessions."
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Quite right.
I should have been clearer. By "strategic concessions" I mean that MSFT *appears* to be bowing to pressure from the entertainment sector. Indeed, in their semi-official response to Peter Gutman's "Cost Analysis" of Vista, a Redmond spokesperson insists the corporation 'had to do this' so Hollywood et. al would allow their "content" to work on Windows.
Of course, as you recognized, this is absurd: MSFT all but completely owns the small computer market; the entertainment sector would have to concede to their demands, not the reverse. If MSFT's concern was, as they claim, the "user experience", they could have refused AACS deployment and there's little Hollywood could have done.
The appearance of concessions is important to mask (though poorly) the fact that, as you say, the OS' primary function is to act as a marketing platform which happens to have computational functionality.
The addition of the Advanced Access Content System (AACS) component in Vista enables MSFT and its entertainment sector partners to create a false scarcity - that is, by using the technology to limit, constrain and otherwise interfere with your ability to use "content" as you'd like, they can treat electronically stored movies and music as metered commodities in defiance of what the technology could do and has done, until the AACS era.
Also, MSFT is performing its usual "embrace and extend strategy": they create the de facto software implementation of AACS and gain, slowly but surely, all sorts of new power over both the market in general and their Hollywood allies of convenience, who will wake one morning to find themselves paying a Microsoft tax they didn't anticipate.
This is a new development.
.d.