Firstly, I am no fan of Microsoft, but I can't see anything wrong with what Bill Gates was saying.
Some of it was a bit dubious when he was goaded, but basically what was said was that they don't release a new version just to fix bugs. Of course some things are fixed in a new release. If you know of a bug then it should be fixed, unless the workaround is so entrenched that fixing the bug will cause more hassles than leaving it in in the first place.
It makes business sense to provide more for a consumer than just a bug fix. A simple bug fix should always be free (and basically is in most cases).
As an aside, yes, they should take users reporting bugs more seriously than it seems they were based on that interview (or actually looks more like an interview extract). There will always be bugs. That's life.
Finally, although he says less than 1% of calls involves a bug, it should be noted that, at least on later versions of Windows, most bug reports are submitted electronically.