I just finished reading this,a nd what I found very interesting is each of these anecdotes was a story of innovation prompted by close observation fo human need. Wiht all teh talk right now of user-centered design smothering innovation I think that this article illustrates that true user-centered design actually promotes innovation.
How to Design the Perfect Product
emphasis mine:
"After reviewing industry trends and witnessing the difficulties that warehouse employees had when using rolling ladders to get parts, Crown developed an entirely different product. "
"Sam Farber, already a successful entrepreneur, sensed an opportunity in the housewares industry after watching his wife, an arthritis sufferer, struggle with existing kitchen tools. Farber's insight introduced utensils that weren't just comfortable to use, but that also set a new aesthetic standard. "
"To stay in the upper right, you have to keep injecting useful, usable, and desirable features. "
and so on.
The other thing I like aobut this article is how it incorporates beauty and use to define a great product, and points out techn0ology alone is not the answer:
"Now let's look at the Rotato Potato Peeler, which falls into the lower-right quadrant. It is a technically driven peeler, the latest incarnation of the frightening 19th-century mechanical peelers with exposed blades.
Cagan: As seen on TV!
Vogel: Companies often try to improve on the generic product simply by adding new technology. Add more gadgets, and make it spin, electrify it, or hand-power it. The Rotato supposedly reduces the amount of labor -- but it also takes off at least an eighth of the vegetable.
Cagan: Plus, the Rotato is cumbersome to use. And it's ugly. You don't really get very much lifestyle impact.
Vogel: But the American ethic says, If you add more technology, it's always better. If you add a power train or a turbo boost, you've automatically improved it. "
Today Amazon introduced the soon-to-be standard dancing tab with hairy feet. Yes, another exciting innovation that will spread across websites like wildfire. 
I should have smelled trouble when the gold box showed up. I think I remember the gold box from digging through my publisher's clearing house packet. I've finally learned to stop clicking it. All it ever offers me is blenders. Oh, Amazon, I thought you knew me better than that.
The final insult is the message center. I thought, "hey they've been managing my friends. Perhaps they have decided to create a special email for Amazonia, the community that has sprung up around people who like the same stuff." But no, it's just spam! and does this mean they don't still send me spam in my regular email box? Nope, it means I get spam everywhere. It's like getting a big brown box from Amazon, opening it all excited-like, and discovering it's full of direct mail. bah.
IBM/Ease of Use/Simplifying Tasks, the unorderable poster.
via cam