Paul says we're dead because we've become irrelevant. Well, maybe in the cyclical world of fashion we've become less relevant to a small percentage (how may actually use OSX or Linux compared to a flavor of Windows, even if you're running Firefox on WinXP you're still using a MS product).
Microsoft is a billion dollar company. With hundreds (if not thousands) of products (hardware and software), research projects, revenue streams and consultancy engagements helping to secure their future - and one thing they've learned over the years is to adapt and adopt.
While they may not be as nimble as some of the web 2.0 companies they have some pretty solid foundations and an understanding of what it takes to make a long term play.
Am I worried? Do I wish I worked for Yahoo! or some web 2.0 startup that might not be here in 3 months (I remember the dot com bubble)? No I'm not. And I'm not the only one.
After all, at Microsoft we'd like to be cool, but we prefer to be popular.