Note that one of the funders for this project is Google who runs Linux on their tens of thousands of servers. I have to believe that Mircosoft is concerned, but there's nothing stopping them form providing a stripped down version of Windows for a cheap PC.
The time seems right for this project.
Move over Microsoft, Dell. The $100 PC cometh. From MIT. by ZDNet's David Berlind -- As a part of what he says is his life's most important work, MIT Media Labs director Nicholas Negroponte is on course to deliver a $100 laptop to the people who need it most: the world's children.
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