Without being an apologist, how many of the cultural blunders are more a matter of scale than anything else? (What cost in usability are you willing to pay for sensitivity?)

For example, the current Microsoft Windows date-and-time widget doesn't draw time-zone lines, even though it does roughly center the map over the current time zone. Turns out that this is because time zones are political: Kashmir officially belongs in one time zone, according to India, and in another, according to Pakistan. The same is true for other disputed lands.

And so Microsoft--having been hit by this over and over--makes the time zone map a boring green without distinguishing features. Which means that millions of users who really don't care about Kashmir when they're trying to set the time are crippled.

What should Microsoft do with products like Encarta World Atlas? Or the dictionary?

The Spanish-language version you refer to has to deal with the fact that (as the Guardian article points out) "woman" in Spain is "bitch" in Central America.

Is this Microsoft's fault? How many regional tweaks should happen? I grant there have been missteps (the Koran story, for example) ... but Microsoft is in the tough position of having a big world market.

I sincerely don't know what the right way to handle this sort of thing is...