Forstall may have deserved it for the maps fiasco. I feel Sinofsky has done a good job modernizing Windows. As with everything there is probably more to this than what meets the eye.
I read that he had nowhere to go. I'm just parroting someone else, but he wasn't qualified to be a CEO, and there isn't another managerial position above Windows lead. He can leave, gain some CEO experience, than come back and take Balmer's role.
Either way, it's pretty sad, he's basically the guy that saved Windows from Vista, and kept Office the cash-cow that it is.
Windows 8 lady is in charge? Oh my God...
Either she'll have no opposition and can go 100% metro (which would solve a lot of issues people seem to have), or she's responsible for the problems with metro, in which case yes. God have mercy on us.