Re: MS getting its grove back?
I think they've got a chance at the lower end, definitely. Stephen Elop had a point when he compared budget Android phones (which tend to be not so great) against the new low-cost Nokia models. If the new budget Nokias run Windows Phone 8.1 as well as he suggested, they could have some winners.
The OS itself looks more aesthetically charming and functional than the current version (and it should, long as they've been working on it). I played with it a bit at Build, and it seemed solid. That said, a lot of its appeal involves the personalization features. It's hard to judge those when you're holding a display sample with no access to your personal data.
On a related note, there was a rumor floating around a while back that Cortana will eventually get released for iOS and Android. I couldn't get Microsoft reps to even hint when/if Cortana will extend over to Windows 8.1, so needless to say, there was no talk of this sort of cross-platform strategy. I can see interesting pros and cons either way. Cortana itself seemed to work pretty well, though it confused Berkeley, CA for some other Berkeley on the other side of the country. But considering how noisy the conventional hall was, Cortana did a reasonably good job understanding my questions. At least as good as Siri in that regard, I'd say, though it's hard to say something more holistic from so little exposure to it.