Linus Torvalds has said that he would consider contributions from any source, and that although he makes jokes about Microsoft, that Microsoft hatred is a disease. Recently Microsoft released 20,000 lines of code under the GPL that will allow better Linux integration with Windows Server 2008 Hyper-V or Windows Server 2008 R2 Hyper-V. Some commentators have said that this move was selfish, and others have claimed that the move was forced on Microsoft by obligations of the GPL.
Microsoft has been involved with many actions seen as antagonistic to Open Source, such as funding SCO's legal challenges to IBM for Linux contributions, conducting a smear campaign against Government officials who support open formats, threatening to sue over patents without disclosing which patents and undermining the credibility of the entire ISO in order to maintain their lock in with file formats.
On the other hand Microsoft is increasingly working with Open Source companies where it makes strategic sense, such as supporting a LAMP stack without Linux. At the same time Microsoft has had a profit hit both from the decline of PC and Notebook sales world wide, plus the increasing popularity of Netbooks which run Linux or Windows XP, which is now an end of life product.
In New Zealand we have seen the G2009 agreement collapse, and this may accelerate adoption of Open Source deployments. The contribution from Microsoft of code which allows Virtualization of Linux on Windows seems to show that regardless of Microsoft's attitude to Open Source they are now being forced to take Linux very seriously as a permanent part of the IT scene.