i think they did pretty well with the 360 (apart RROD of course which i had the pleasure to experience once - but i was truly amazed of the ms customer service).
ms had a good feeling of what the console neeed or not and when (blue ray wifi etc.) - at least in my book.
i played pc and (today retro) consoles as a kid - many of my friends had ps´s later, and then ps2´s which i had as well, also i had a dreamcast and a gamecube. only one friend had a xbox were i played and enjoyed halo - still before this gen launched i wanted to buy a ps3 of course.
then xbox launched earlier, starting the next gen - i think this was the most clever thing ever. i couldn´t resist, bought one, loved it, got rrod, hated it, got a brandnew one and 3 month xbl for free from ms, loved it again.and then i got so used to the console that i beleived i do not want a ps3 anymore. for what? ok exclusives. the big exclusives war of this gen.
i had 4 or so 360´s - right now i have a 120 gb elite again after trading it in for the slim for nostalgia reasons. i will probably keep this console untill the next gen starts.
i just love the 360 pad - it´s the best for me. it is perfect imo and i really hope they don´t mess it up with the next console. i really hope.
i had ps3´s this gen too of course - had both consoles for quite some time - really like the ps3 - but the ps 3 wasn´t able to deliver some "emotions"...the games did, but the console feels cold and boring (interface, ps store is horrible, friendslist etc)...and i never really liked the ds controller. that´s just my opinion. i can understand if someone prefers the dualshock or the stylish and slick interface of a ps3...i just don´t. i like that the 360 has a more toyish approach interfacewise. it is still techy and modern enough. to me these things are still gaming consoles. i use them for that.
i am superexcited for the next gen. right now i am much more excited about the next ms console - but we´ll see. i will buy which i think will be the one i can enjoy the most, not because one company or the other manufactures it.