Microsoft is a SOFTWARE Vendor -- nearly everybody ( including one man and his dog under \"the railway arches\" ) can probably do Multimedia better than MS -- they are only trying to play Catchup -- and messing around with the DRM crud made them fall even firther behind .
THe point is that, strictly speaking from an end-user point of view, do most end-users know of any other formats besides MP3, AVI, DIXV, MIDI, WAV, MPEG and MP4?
All my colleagues have not even heard of FLV in spite of the fact that it's the format used for youtube and myspace videos. And the class which graduated with me a couple of years ago didn't even know that WAV existed until we had to use WAV files for our film project.
I run MPC for anything I can't play in WMP. I've had too many issues with sound not staying in sync with VLC. With the Win 7 codec pack though I haven't found much that won't play in WMP now.