Microsoft played it safe. From incremental technologies to some amazingly cool chips, to “there’s not much new to discuss here”, they covered almost everything but cloud tech.

Among some of the things announced:

• AvatarKinect for Xbox. Free for Xbox Live Gold Members, the new avatars recognize facial expressions and interact with each other via Kinect. You can move your eyebrows, talk with your friends, and do it in 14 engaging environments. Ballmer also covered some of the more interesting sales statistics: over 50 million Xbox consoles sold, 8 million Kinect sensors sold in the first 60 days, and 30 million Xbox live members, making Xbox a billion dollar business on it’s own.
• Windows Phone 7. Liz Sloan enthusiastically demoed the Windows Phone 7, utilizing the voice activated cut & paste feature (coming soon), showcasing the camera, sharing, home tiles, hubs, and office. There are several new games, including Fable coin golf that allows point collection on the phone with the ability to transfer currency to the Xbox console via Xbox Live. The only stats Microsoft was willing to divulge include: over 5,500 applications now available on Marketplace, over half the customers purchase 1 app per day, and there are over 2o,000 developers registered and counting. No numbers regarding Windows Phone 7 sales.
• Windows PC/Tablet. We had mentioned that we wanted to hear more about Microsoft’s tablet strategy earlier this week, and while they didn’t focus on a strategy, they did show some pretty cool tablets. The Samsung slider is a dual screen PC that weighs 1 kilo and transforms into a tablet via a screen that slides under the first.  Acer has a Tablet PC has some killer looks, and multi-touch pen and finger. Most of these PCs were running on the new Intel core processors, multi-core CPU/GPU for 20% increased graphics performance. We would have liked to see Windows Phone 7 on tablets but sadly, it wasn’t in the cards this year.

• Next version of Windows. This is probably the most exciting announcement. System on Chip (pictured above) puts an entire computer in the palm of your hand. They demoed SoC running on ARM systems from NVIDIA, Qualcomm and Texas Instruments. More from Microsoft’s press release:

SoC architectures consolidate the major components of a computing device onto a single package of silicon. This consolidation enables smaller, thinner devices while reducing the amount of power required for the device, increasing battery life and making possible always-on and always-connected functionality. With support of SoC in the next version of the Windows client, Microsoft is enabling industry partners to design and deliver the widest range of hardware ever.

• Surface 2. The next generation of Surface is a table-sized tablet with a touch screen. Every pixel in display acts as a camera. It’s made of  Gorilla Glass which is virtually unbreakable (it can resist a bottle dropping from 18 inches).

Overall, it wasn’t too disappointing. There wasn’t any mention of cloud tech but it looks like Microsoft is betting on Windows, which isn’t a big surprise given it’s their cash cow. In the end, Ballmer wrapped it up by telling the crowd “Whatever device you use, Windows will be there.” It’s no Apple event, but it’ll do.