RIP Microsoft WordPad. You Will Be Missed

Generally commercial drive encryption solutions, like Bitlocker, usually has a backup recovery key that can be used to access the encryption key if your TPM is reset, or if your device dies.

So I guess the short answer is most of these solutions don't fully protect it from being moved to another device, they just add another layer of security and hassle that makes it harder to do. And without the TPM as part of these solutions, you would be entering a 48-character passphrase every time you boot your device, which has several security flaws of its own.

Assuming you use bitlocker on your PC, how do you know the entire content of the TPM (your bitlocker encryption key, etc) cannot be fetched from the TPM by the manufacturer or any third parties they shared it tools and private keys with?

The TPM specification is an open standard by the Trusted Computing Group, and there are certification organizations that will audit many of these products, so that's a good place to begin.

As with any of the hardware in your device, it does require some amount of trust in the manufacturers you have chosen. These same concerns would apply to anything from the onboard USB controllers to the CPU itself. There's no way to be absolutely certain, but you can do your due diligence to get a reasonable level of confidence.

And because it is hardware based, how do I as a user know that it does what it claims it does as I would with a software based encryption software that is open source (like truecrypt/veracrypt).

This is a reasonable thing to think about, although very few individuals are qualified to understand and audit the source code of encryption software either, so in most cases you are still putting your faith in security organizations or the community to find issues.

When it comes to security, it often comes with a trade-off. Hardware devices can achieve a level of security that software can't completely reproduce, but they are a lot harder to audit and verify their integrity.

In any case, the TPM is something that software solutions have to explicitly call in the first place, it isn't something that activates itself and starts digging into your hard drive. Which means if you don't want to use it in your security solution, then it will sit there and do nothing. You can keep using your encryption keys in clear memory, visible to any privileged software.

I don't know specifically about the XBox and how it uses it, but the TPM absolutely can be used as part of a DRM scheme. Since the TPM can be used to encrypt data with a key that can't be exported, it could be part of a means to hinder copying of content. Of course this content still has to be decrypted into memory in order to be used, so people looking to defeat this DRM usually still can. DRM as a whole is often shown to be a pretty weak solution for copy protection, but companies won't stop chasing it just the same.

Here's the summary for the wikipedia article you mentioned in your comment:

Windows 2000 is a major release of the Windows NT operating system developed by Microsoft and designed for businesses. It was the direct successor to Windows NT 4.0, and was released to manufacturing on December 15, 1999, and was officially released to retail on February 17, 2000 and September 26, 2000 for Windows 2000 Datacenter Server. It was Microsoft's business operating system until the introduction of Windows XP Professional in 2001. Windows 2000 introduced NTFS 3.0, Encrypting File System, as well as basic and dynamic disk storage. Support for people with disabilities was improved over Windows NT 4.0 with a number of new assistive technologies, and Microsoft increased support for different languages and locale information. The Windows 2000 Server family has additional features, most notably the introduction of Active Directory, which in the years following became a widely used directory service in business environments. Four editions of Windows 2000 were released: Professional, Server, Advanced Server, and Datacenter Server; the latter was both released to manufacturing and launched months after the other editions. While each edition of Windows 2000 was targeted at a different market, they shared a core set of features, including many system utilities such as the Microsoft Management Console and standard system administration applications. Microsoft marketed Windows 2000 as the most secure Windows version ever at the time; however, it became the target of a number of high-profile virus attacks such as Code Red and Nimda. For ten years after its release, it continued to receive patches for security vulnerabilities nearly every month until reaching the end of support on July 13, 2010, the same day that support ended for Windows XP SP2.Windows 2000 and Windows 2000 Server were succeeded by Windows XP and Windows Server 2003, released in 2001 and 2003, respectively. Windows 2000 is the final version of Windows NT that supports PC-98, i486 and SGI Visual Workstation 320 and 540, as well as Alpha in alpha, beta, and release candidate versions. Its successor, Windows XP, only supports x86, x64 and Itanium processors.

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Same problems, different name, and some new problems thrown in on top. Moving along.