I have to chime in with my worthless opinion on this one too.
Xbox isn't going anywhere - as a matter of fact, they are poised to be the best entertainment system on the planet. I would look for a lighter version of the Xbox to come out that supports streaming content and is more of an entertainment system than gaming one. This would give them something to position against Apple TV, Chromecast and even the "Smart TV" concept. When combined with Xbox Music/Video/Gaming you have a system that is much more powerful than the competition.
Bing... Oh I love Bing and I hate Bing... Taking Bing mobile is a huge thing and with the Foursquare deal, it just got much easier. By paying to use Foursquare's databases, location info, mapping and personal usage data just became abundant. Bing was 100% dependent on the agreement with NavTeq from 10 years ago. Sure, the GPS was good, but the maps just weren't keeping up. Using Foursquare will help the mapping data immensely. As far as the rest of Bing goes, as long as I can find the data I need on the first page of a search, I'm good with it. I know others prefer Google or something else, but honestly, it works just fine for most searches.
Now, killing the Surface is something that actually makes sense... UNLESS... What are the chances that RT goes away and tablets start running Windows Phone? Since WP 8.1 supports higher resolution screens and multi-core processors, it would make sense to allow manufacturers to place Windows Phone on their 7"-10" tablets. Since the core is now similar to Windows 8, you should easily be able to port over the core Apps to make the tablet function like RT does, but give it the compatibility that it needs to run the WP Apps - which are more plentiful than WinRT Apps. This would play out nicely for moving the "Surface" line to the "Lumia" line and continuing to build Microsoft Lumia phones, phablets and tablets. Microsoft would then continue to sell touch screen PC's with full versions of Windows through third party manufacturers - though they may want to bring those in house also if Google gets their hands on Lenovo or what's left of the Sony PC division after the buyout this week. I like the move of bringing ONE mobile OS to the devices. Keep it streamlined enough that a basic 1GB RAM/8GB Storage device can run it, but powerful enough that a 2GB RAM/64GB Storage tablet can flex it's muscle as well. The system is pretty good overall right now, but by allowing it to run on multiple devices, you could theoretically have the "Three Screen Concept" going on at least 2 of your three screens...
Now - additional things that Nadella should do...
Along with merging the tablet and phone OS, he should contract with the Bluestacks crew to develop a great Android emulator for WP. This would help those looking for all those "missing apps" get them back with minimal effort. Also building that into the tablet system would expand the experience to those coming over from an older Android tablet (plus ease the blow of having to repurchase Apps for another system.)
Create a unique reason to purchase Windows again. The first thing that comes to mind here is a big cash offer to Nintendo - and I mean BIG! Bring Mario, Zelda and the rest of the Nintendo crew to Xbox and Xbox Mobile. This will not only increase the sale of Windows PC's, Xbox's and WP's, but it will also increase the ability to market to younger kids and parents that remember the 'good ole days' of console gaming. We already have Nintendo emulators on WP, so why not make it official and bring this stuff home. It's not like $500 million or so wouldn't be enough to get Nintendo interested. Just do it already!
Now that we have solidified the OS's down to two, we need a better communication between them. Why on earth can't I wirelessly sync photos to my PC (not using SkyDrive/OneDrive) like I did with Zune? Welcome back 2008... Develop a Windows Phone Sync for Xbox and Windows that blows the others away. My biggest complaint with the iPhone is that I have to use that crappy iTunes software for everything. No thanks... Microsoft needs to get back to a software where we can control the music, photos, videos and files that go to our phones just like Windows Mobile offered. Maybe they should bring back the sync cradle too?
Oh well, I could go on and on with this stuff they should do, but really, 2 OS's - one mobile, one PC - and get something exciting in the works for Windows Phone gaming. That should be a great start to getting things rolling with the new CEO.