Microsoft didn't just cut off Quicktime, IE 5.5 SP2 and IE 6 just no longer support netscape plugins. Companies should have moved to ActiveX plugins for Internet Explorer by now and most of the major ones have already.
I think removing the Java VM from Windows XP was a good idea, better to let users download the current Java VM from Sun ( http://java.sun.com/j2se/1.3/jre/download-windows.html ) then continue to bundle that old out dated version.
I'm not sure what you mean by Windows XP tinking with mp3s, there is nothing stopping you from installing a program to encode mp3s.
And the Kodak issue with Windows XP has already been resolved, check out any of the recent reports like http://dailynews.yahoo.com/h/ap/20010812/tc/microsoft_kodak_3.html