Call me old school, but I believe OS should be just that - operating system. To enable your computer to boot and support drivers. Microsoft has proved in many ocasions (as court rulings said) that it tries to kill off competition by bunding a similar functionality program - from IE vs Netscape through Media Player (Windows N) to desktop search engine, to name just the well known ones.
Additionally, a general one-size-fits-all program will never be as good as specialized one. For example, anyone who is serious about video editing would never use Windows Movie Maker, but a specialized program. And that's bloat for the thousand others that don't use it - and ever for that person after he has played with it a couple of times.
Also, there are many 'features' that seemed like a good idea to Microsoft at the time of launching an OS (and maybe they were, but never took off) or were made obsolete over the time, but they are installed on every computer in the world anyway (AOL and other ISPs bundled with Windows 98 - right at your face on the desktop, web folders (how many people actually use them?), briefcase, clipbook viewer etc. (if you want more, just see nlite
And yet another category that is incredibly useful for the ones who use it, but total bloat for those who don't - terminal services, front page extensions, languages and keyboards, Internet games...
I would not have a problem with those or with WMP11/IE7 (to get back on topic) if they were just a bunch of files, but they take literally thousands of registry entries (com/ole and filetypes), which are read all the time by windows and significantly slow down normal computer operation. And in latest service packs there is no way of removing most of the components - add/remove just hides the shortcuts.
So that's what I meant. (And please note I've not even touched Vista).