There is a lot of talent inside of Microsoft. It is everything that happens above the talent that inhibits that talent's ability to make really great things.
While [the Arc Touch Mouse](http://www.microsoft.com/hardware/arc-touch-tutorial/) is very, very interesting and seemingly well done it is still based off an old "mouse" (read: move around your desk and move the pointer) paradigm. [The multitouch touchpad from Apple](http://www.apple.com/magictrackpad/) is, in my opinion, much better and more forward-thinking because it is getting us closer and closer to having all touch-based interfaces for our computing devices. It is why I switched from using a mouse. I never want a mouse again.
I don't want to take anything away from the people that worked on this mouse at Microsoft... but I'd like to know if Microsoft would have let them work as hard and long on creating a next generation touch device rather than only a slimmer mouse. And then actually be able to ship it.