I would say that MSFT products being "pretty" demonstrates how little they get it. They think that making something "designed" means smearing pretty on it after you're done, as if you can design a web application by building something randomly then hiring a graphic designer to make the page slook nice just before you go live.
- Steve Jobs
Some of their products really are excellent -- usually ones that are largely independent shops that haven't been entirely squished into the conglomerate, like the Expression suite and a good many of the MS games.
It seems to me that the ones that have the most issues with inconsistency and usability botches are the ones that get the most micromanagement, like Office and the OS.
I enjoy the games themselves but the design seems extremely ad-hoc.
XBox 360, Silverlight, Live Maps, even Vista, are at least comparably pretty to the competition, and some would vie, even prettier.