Here's my plan.
I would work on optimizing the hell out of Windows. Sure it's just a bunch of hacks, but many problems are just sloppiness and lack of common sense programming. It can be much better(although still not Unix) even if it is still a bunch of hacks.
Slowly we could keep Wind0ze compatible as it ever was and "common sense" fix it. Policies of bloatness, incompatibility etc. would be abolished. With each new patch, Windows would start getting better, like a cure slowly beating a diease.
I would seek to slowly take away the ammo that us Linux d00dz have against MS. Over time you could still claim many problems, but there severity would be greatly weakened. Thus the smarter people are much less inclined to seek out alternatives.
In addition, I would really try to reverse the "evil, greedy monopoly" aspect that the Linux community has against us. They either take away or tone down their claims, or else XP user #00000 can actually prove you guys are lying.
Note that Pallidum would be SCRAPPED, far too much anti-MS ammo for Linux d00dz and smart computer advocates.
This still would all be part of phase 1.
Phase 2 would involve a top secret new OS. It's not Unix, but it learns much from it's successes and Windows/dos failures. At the end of phase 2, MS will still be a giant monopoly, but it's a much more fair monopoly who realizes the importance in leaving are enemies verbally unarmed. We allow for competition, in fact we ENCOURAGE IT! We use our massive profits and clout to create awesome software, in fact hackers are even hired to give us fresh new insight into not becoming stagnated. Still windows(new system would lose this loser name) would not be open source.
However, this would be Shawn Ratzloff doing all of this out of common sense. If it was my current self, Microsoft would change even more to become less evil, although I don't feel it can still make giant profits if it was open source.
Why the f**k Gates doesn't catch on to this concept is beyond me. He is only here because of luck and luck won't last forever. The underground(us) has tremendous amounts of ammo that can be backed up, he cannot win if were armed. So the only way to unarm us and still be evil is to take away any software incentive(other then moral) to switch to Linux.