Microsoft’s record at competing with Apple is not the best...remember the Zune that was supposed to sweep away the I-pod? Apple has a real advantage in that all its phones, I-pods, I-touch and I-pad products share I-tunes which offers thousands of popular apps. Android based products haven’t caught up with this number of apps and Microsoft would have to build its own I-tune interface if it wants to compete.
The mistake in that is assuming that this is inteneded to be a direct competitor to the iPad. It is not, because it is also aimed at business. The ARM devices, which will be the ititial offering will be in the consumer/enterntinament market and will be comparable to the iPads. The x86 based Pro models that will run full versions of business apps are not competeing with the iPad, becuase they're targeted at different market than the iPad was designed for and targeted at.
Microsoft has had it’s own iTunes interface for about 5 years. It’s moving towards it’s xbox live model now, which is used across it’s PC, XBox, and even android and iPad tablets. It has had it’s video and music download service for awhile.