Windows Media player 11 has a great interface and a wonderful library manager but little potential to replace iTunes because WMP 11 doesn't have any support for Podcasting. GeekNews thinks the Microsoft had an opportunity with Windows Media Player 11 to get in the [podcast] game, but their inaction will slow the growth of podcasting in a big way.
But it makes sense Podcasting does not make them any money, if I were a betting man I bet MTV had something to say in the process and likely killed any Podcasting integration as it would have made the URGE network a lesser value.GeekNews has made a good point here. But Microsoft has a history of entering the game a little late and then try to destroy competition with their marketing muscle power and huge user base.
As far as Podcasting is concerned, Microsoft has starting taking some slow moves.