Shocking news from New York Times is that the passionately open-source team behind the hundred dollar laptop have done a deal with Microsoft, so that the X0 laptop can run Windows as well as Linux.
After-shocks are flowing throughout the community, with several leading OLPC developers resigning and much angst being aired in the blogospere - as well as some misleading "microsoft buys OLPC" headlines. 
So what really happened?
OLPC has agreed to make a few modifications, so that the XO has more power, can support larger memory cards, and can therefore run Windows (as well as Linux). Total cost to the punter: around $10 more.
Why is this a big deal?
For Microsoft: Corporate market share.
They are trying very hard to be big in education, to be big in the 3rd world, and to be big on small-devices (pardon the pun). The success of initiatives like OLPC was proving that they were failing in this ambition - but now they are back in with a chance. The big compromise they have made is to accept the OLPC can be "dual boot", supporting Linux/Sugar as well.
For OLPC: Fundamental clash!
Many of the teams working on OLPC were doing it for free, for a passionate belief in Open Source, and the power of the collective mind to solve world problems. They were not in it for the money. This is starkly at odds with Microsoft's image, which is why this news is generating such a lot of fall-out.
And what is likely to happen next?
OLPC has been suffering quite a few pains recently. All the tricky bits of deploying and distributing thousands of devices to hard-to-reach places. There have also been several high-profile splits and departures in the senior teams. At the worst, this news could drive away many of the remaining enthusiasts, leaving a chronically depleted team. At best, this could drive significant new sales, and re-energise OLPC, helping them become more successful.
For a well thought through essay on the OLPC problems, from the inside, see Ivan Krstić's post
The bad news: this calls into question the roots of our belief in the power of open source to solve big problems. Sadly, power and politics always seems to get in the way.
The good news: OLPC wasn't all about software and equipment anyway - it is really all about learning. Using learning-centred technology to support 3rd world kids, and leapfrogging their life chances with education. This hasn't changed ... all that has happened is that their devices have got a bit more powerful (and possibly, expensive)
I say we focus on the learning - and make sure the OLPC keeps its learner centred ethos, regardless of the technologies
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