How is it a monopoly if there are alternatives? You've already noted two. You're apparently just whining like a liberal because you don't like Microsoft.
Monopoly in this sense means that you can control the market and set prices since you have such a large chunk of it. It doesn't mean you have to own all of the market. Microsoft for years was able to control the OS and office productivity markets. The fact that MS-lovers here say "IE is the web standard, therefore site operators should write to it" means to me that IE is a monopoly -- it has a large marketshare and can control the market. It's already set the price of a browser at $0.
Due to the increasing popularity and usability of alternatives, and their forced change of behavior regarding OEMs, I'd say their OS monopoly is waning. A combination of Firefox and MS's own complacency is hurting their IE monopoly. Their Office monopoly still stands, although it is about to slide due to Massachusetts using the market (as opposed to a lawsuit, I like that) to force MS to open their Office format.