I happened to visit one of the many Apple stores here in Seattle today, just because I happened to be nearby. It was in Bellevue, not 20 miles from Microsoft headquarters. It was cool looking around, seeing all the different Macs together at one time, simultaneously running the same programs. In that kind of setup, you can easily see the difference between a the white and dark MacBooks, and how thin the Air is compared to other models, and how fucking huge a 31" screen is, and how small the Mini is. Plus, they have all the iPods lined up, including the new one that's no bigger than a coin, and each one of them is loaded up with songs and has earphones, so you can listen and play with the controls.
Also, they have iPhones everywhere, resting in docks, waiting to be touched. It was like every single computer in the store (20+) had it's own iPhone. I couldn't help myself - I picked one up and toyed with it. I went to the map page, and saw that the GPS was working perfectly, and stood there staring as the GPS position updated itself based on what satellites were nearby (presumably, it's the cell towers that get the satellite signal, which is sent to the phone via radio wave). Then I used the built-in Safari to view a web page. It was fucking unreal, having a website be perfectly rendered in miniature on that tiny screen. I had a hard time typing with the side of my thumbs, but I'm sure I would get used to it. I've never really wanted an iPhone or a GPS unit before, but I want one now!
And the service, wow. Each of the computers has iTunes installed, and has a purchase account already setup. So if you want to know how to download music, the clerk shows you how to buy a song at iTunes, download it to your computer, and then upload it into an iPod that he carries with him just for that purpose. The clerks also have USB sticks with compressed Outlook mailboxes and IE bookmark files to show people how to setup Mail and Safari.
All of the above was conveyed in order to explain to you why Microsoft retail stores would be a bad idea. Microsoft makes very few products. And those products are not 50x cooler when you see them in real life, like the iPod shuffle, the MacBook Air, or the iPhone.
However, an Xbox arcade would be a great idea. Have a bunch of Xbox 360s attached to TVs, but with a weird coin-op system next to them. You come in and try out the games, and you get like 5 minutes for a quarter. Then the games and the hardware are on sale at the back of the store. Kids would shovel quarters into those things like crazy, and then they would be freak-excited about buying the games. Hype for games and new hardware would increase, brand loyalty would increase, because kids and moms see the name every time they go to the mall (as opposed to sharing the hype with Nintendo and Sony at gaming stores). Not to mention that those quarters would pay for the fucking store within a week or so.
FYI, this economic recession must be somewhere else. The 3 busiest stores I saw were the Lego store, GameStop, and the Apple store. Not exactly depression-era products...