It certainly can be difficult working around a megalomaniac, especially when they are MUCH smarter than you. 
If I remember my Cringely, most people seemed to think that writing a BASIC interpreter for the Altair would be impossible, until Bill Gates (along with Paul Allen) actually did it.
As for Jobs, I think he deliberately downplays the extent of his technical smarts. When he debuted the G5 at last year’s WWDC, he talked about the G5’s branch prediction unit and got a laugh when he noted that it “uh … predicts branches.” Obviously, even if Jobs somehow didn’t know exactly what a branch predictor did, he could’ve found out; I think he prefers to paint a big, broad picture rather than get down into the nitty-gritty. It confirms a feeling I’ve long had that Apple is a user-centric company where Microsoft is a developer-centric company; for all the usability testing MS supposedly subjects its products to, they still have the feeling of being built from the inside out (“How can we put this cool new technology to use?”), while Apple designs from the outside in (“How can we enable our users to do this task really, really easily?”).
Bill Gates is a technical genius, but much more of a generalist now. He stopped running the business side of things about 5 years ago, leaving that up to Steve Ballmer (who is above all a businessman). Microsoft is so much bigger now that Bill couldn’t possibly have his fingers in every pie the way he did before.
Bill’s official job title is Chief Software Architect, which means that he is in charge of ensuring that the various parts of Microsoft have a cohesive road map towards integration, which is not something Microsoft ever had before. The change is notable, especially with emerging products such as Visual Studio .NET, Yukon, and Longhorn. And the deeper integration between the Windows platform and various other parts of the company (such as office) are a direct result of this, resulting in a much more unified vision moving forward.
I can’t speak about Jobs, as I have read only second-hand accounts, but for all of that he was frequently lauded as one of the best informed CEOs in the business as to what his company was doing.
A recently-released book, Fire In The Valley, chronicles the development of the original Macintosh from one of the key co-creators. It’s got lots of firsthand Steve Jobs anecdotes, if you’re looking for a view of the guy. The Second Coming of Steve Jobs is also an interesting read, though it’s all secondhand information and slightly suspect as a result.
IMO, Jobs’ reputation for being a megalomaniac/asshole is somewhat due to his training in Zen Buddhism. One of the ways he pushes people to do their best work is by tearing them down – folks end up doing even better work in order to prove him wrong, as it were. Some of his behavior is also old-fashioned assholery, but it seems to have waned a bit now that he’s gotten older.