People tend to think of Microsoft as much more backward than they actually are. Yes, Microsoft isn't the brighest when it comes to open-source, but they do at least try. And yes, if you're going to live in the Enterprise world, things are a little old fashioned, but that's a reflection of the market, not the vendor. Microsoft makes tonnes of neat stuff that never gains traction because people seem to have convinced themselves that MS is an enterprise-only shop...
I tend to think of Microsoft is backwards because of their reluctance to allow the Internet to be important. For a decade (say, '00 to '10) they basically ignored all the good things about the Internet and tried their best to keep "the old way" relevant.
They're slowly getting better (see IE9, Bing and Office Live...all good, but also all very recent) but it's absurd how far behind they are on the Internet.
I don't doubt that there are cool, modern projects going on at MS. But they corporate push over the last decade has definitely been: ignore the Internet.
Some examples:
http://blogs.msdn.com/b/efdesign/archive/2010/06/01/conventi...
http://microsoft.com/web/webmatrix
http://ironruby.codeplex.com/ | http://ironpython.codeplex.com/
http://visitmix.com/ | http://edge.technet.com
http://officelabs.com | http://www.microsoft.com/visualstudio/en-us/lightswitch
http://microsoft.com/express | http://microsoft.com/dreamspark | http://technet.microsoft.com/en-us/subscriptions/default.asp...