Well thats going to be a problem, if Microsoft truly embraces Geohot then Sony's legal case which is already scattershot and tenuous is pretty much dead if Microsoft's legal team get involved.
1. Microsoft can get away with nearly anything.
2. Microsoft hires Geohot.
3. Geohot working for Microsoft gets away with nearly anything.
The other thing to consider is that Microsofts systems have traditionally been more open. They give development kits out to XNA developers with close to the same rights if not the same rights as console development companies. They also don't restrict what people can develop for Windows so long as it doesn't break anything. Just because they can be a little slow and podgy doesn't mean that because their Xbox 360 is locked down, they are completely locked down likewise.
Tease.
