There are a number of things going round about Microsoft and their reputation... Just as I post a comment to this Scoble post, I notice a few things which connect to it.
Robert says that naming is hard, and of course he's right. There are legions dedicated to choosing the correct brand name for new products. John Topley refers to Scoble's old post on dropping the Windows name in his post about people's hatred for MS, because John is speculating on ways to drop the bad rep that Microsoft has.
Windows is a very strong brand name, but I don't know that dropping the brand would solve the problem. As John says, the problem is with Microsoft's reputation. I think that keeping the Windows brand but creating a genuinely good, considerate piece of software will do a lot more for the publicity surrounding the MS OS.