There is a lot of Chicken Little in that write-up, ("the sky is falling, etc."), though I do not argue any of his points...I do argue his estimation of the impact. First of all, the digital content protection is something that is not driven by microsoft...but is forced upon them...and it is a growing trend as technology advances. The more advanced people get in terms of getting around protection, the more convoluted the protection schemes get. HDMI issues around this, as well as the whole issue of SACD only being able to be output through analog are well documented, and are a big part of the Blu-Ray/HD-DVD struggle. Any other OS company that does not want to get sued for billions of dollars will also have to lock down their system in order to make it not allow for unauthorized reproduction of protected content. When you add a drive into a computer that processes data and feeds it as raw into a system...there are a million ways people can capture that data stream and do with it what they will, so locking it down on a Pc is much harder than in a 1 box solution. This is the cost of playing in the new Blue-ray/HD-DVD game...not some asinine choice by microsoft to overcomplicate things. There are many blind steps ahead before either Blu-ray or HD/DVD (or both or neither) emerges victorius, and some effective standard becomes available...until then things are being replaced and updated as fast as they come on the market.
If it is indeed true that HD content cannot be output at HD quality through any connection, then that is an issue. But, for me...what do I do if my blender won't heat up my sandwich? I use a microwave. I just won't adopt HD HTPC use until it does. It's not like I use it now, so this doesn't hurt me at all.
The "tilt bits" he referred to...likely are treated just like "tilt" on a pinball machine. If it reaches a certain level...there is a failure, and you should not keep just running the device. If it doesn't reach this level, you're fine. In all likelyhood, this will prevent more complete hardware failures (blue screen of death) and even hardware meltdowns...than it will be a useless inconvenience.
Until most of this comes out and we get a chance to see it for ourselves, I think I'll reserve judgement. From pretty much every thing I've heard from every other source, Vista is supposed to be pretty sweet. One long winded naysayer who makes wild speculation about the effect of his claims won't change that impression quite yet.