Microsoft and Sun are slowly but apparently surely moving towards "sharing" more of their code. This does not mean giving their code to anyone in the world for free, and granting that person unlimited to rights to modify, duplicate, and even resell the software with no return revenue to them, as would be foolish. They will use non-GPL license agreements that grant access to the code and possibly the right to redistribute without release, but prohibit "forking". Makes perfect sense, and it is my long held belief that forking will ultimately stunt Linux, just as it did Unix. Microsoft has shown that standards are the future of computing, and the Linux crowd can't even seem to standardize on a desktop.
Good points. Also, I believe that it will be easier for Microsoft to control theft/piracy of WindowsCE than desktop Windows. Corporate OEM's building thousands of identical units running an unlicensed version of WinCE would be difficult to get underneath Microsoft's radar screen; and the liability would be huge.
Linksys couldn't get their linux-based router underneath Stallman's radar. In fact, I doubt they really understood the "IP-grab" implications of using GPL code in their router.
Overall, I think it's a good strategic move by Microsoft.