Microsoft is rarely out of the news and this month has been no exception. But Redmond is moving in new and mysterious ways, many of them to do with virtualisation and licensing -- so what does it all mean?

Here's what's been going on. Over the last month, some Linux developers and distributors have signed licensing deals with Microsoft, the terms of which have not been revealed. The moves are apparently at Microsoft's instigation and are being trumpeted as a way for distributors to avoid litigation as a result of patent infringement.

This follows Microsoft's declaration in May that open-source software, including Linux, violates 235 Microsoft patents and that the company wants distributors and users of open-source software to start paying royalties for the alleged violations.

Microsoft has provided no specifics about which of its patents are involved.

The precursor to all this is Microsoft's signing such a deal with Novell late last year. The two companies then published a joint letter, which said that Microsoft was for the first time "collaborating directly with a Linux and Open Source software vendor. With this news, Microsoft is saying that Linux is an important part of the IT infrastructure.

"More importantly, Microsoft announced today that it will not assert its patents against individual, non-commercial developers. Novell has secured an irrevocable promise from Microsoft to allow individual and non-commercial contributors the freedom to continue open source development, free from any concern of Microsoft patent lawsuits. That's right, Microsoft wants you to keep hacking."

The ostensible benefit of this to the community that customers should be able to deploy mixed environments without the fear of being sued by Microsoft, should any of the software they use contain patented technology. The letter explicitly said that "Novell and Microsoft are providing covenants to each other's customers, therefore releasing each company from the other's patent portfolio."

Xandros and Linspire followed Novell's example earlier this month but others have baulked at signing a deal with a company many regard as close to Satan. For example, French Linux vendor Mandriva said no this month to dealing with Microsoft on open source patents, saying: "We don't believe it is necessary for us to get protection from Microsoft to do our job, or to pay protection money to anyone."

Earlier in June, Ubuntu Linux founder Mark Shuttleworth said something similar, as did Red Hat -- and these last two could just constitute Microsoft's biggest threats. The former is fast becoming the most popular desktop Linux distribution, while the latter has long held the position of the dominant distributor of Linux server OSes. Microsoft has shown that it remains keen to strike a deal with Red Hat.

However, as one observer put it, there are two sides to this story: "On one hand, it's a sexy story to portray this as a bit of a David vs. Goliath, or a shakedown," Jackson wrote. "On the other hand, if a company does not defend its patents, it will effectively lose control of them."

But this week saw an uncharacteristic dither from Microsoft that could hold more clues as to what's going on the minds of the Microsofties. Essentially, after saying that the Basic and Home versions of Vista could be run in a virtual machine, it has now reversed its decision and said that neither can be used in this way.

Could it be that the problem is that Microsoft fears that some distributors of Linux will want to ship Vista in a virtual machine alongside Linux -- offering a similar deal to that provided by Apple's Mac OS X? The low-end versions would the right ones to pick since there aren't any virtualisation technologies out there today that allow Aero, Vista's fancy new user interface, to shine in a virtual machine -- and Basic doesn't have it. What's more, it's cheaper than the versions with Aero.

So the problem for Microsoft is that there aren't enough Linux distributors lined up, and maybe it pulled the plug on that basis. After all, companies the size of Microsoft don't just change a licensing policy overnight: it goes through lawyers, product management, marketing, and a whole host of other processes.

But tempting though it is to start speculating, maybe we'll never know.

Despite that, it does provide the occasional chunk of Schadenfreude just to know that even Microsoft sometimes gets things that are entirely under its control wrong.