I like the UI, but I feel there will be similar problems as with Apple... That being restrictions and whatnot from the closed system. Microsoft looks to position themselves in the middle of the "openness spectrum" with Google being wide open and Apple being locked up tight. Ex. Microsoft won't allow you to skin the operating system to keep a unified user experience, but I foresee them allowing alternative Browsers or Text apps (complete speculation on my part at this point).
I know Mozilla said they wouldn't develop a browser until MS releases an NDK, however I'm not sure how necessary that is. I'm never a fan of the platform developer having access to private API or functionality that third party developers don't have though.
If the UI is as smooth as the Zune HD they could have a great product though. It's just a matter of if it's too little too late, but if the Xbox has shown us anything, it's that MS is willing to buy it's way (back) into a market.