You seem to be implying that the presence of WMP and IE7 prevents installation of anything else. This is simply false and as such the rest of your argument falls down, as does the paint analogy.
Ok question, if all PCs bought with windows had an ISP hookup deal already set up, would you be annoyed?
Little difference...
The business model these corporations play, is that people are lazy and go with whatever they have already installed, the prevailing attitude is that - if it works, why change it?
Considering that most people are terminally afraid of PCs / learning anything new, pre-installed software is more like a "mental monopoly", once you learn how Office works, how/why would you turn to another office-like product with different menus etc? You've already invested in learning one piece of software...
Therefore, as soon as you "get in earlier" with the operating system, you have monopolised the market - even if something better comes along, it won't be considered "of its own benefit" it will only be considered by "additional benefit" with regards to its "additional costs" whereas in windows it is *free*. That is the true monopoly. Windows Media Player, in fact all windows products, are in part supported by the other microsoft products that have gone before and fund the future products of microsoft products.
EDIT : If you don't find accord with my argument, then try to justify for the sake of argument why OpenOffice shouldn't be pre-installed with all new Windows machines... and you aren't allowed to use "because it damages Microsoft's business model" as an excuse.