Being at Amazon, I'm seeing more and more inflow of former MS engineers... damn good ones too. We're happy to have 'em :)
To be honest, I have seen a ton of ex-Amazon folks show up on my team and in other teams :). There are only a few players in Seattle so people tend to go to one of them when they want to stay there (I decided to move to the Bay Area). That might change with people like FB, Zynga now having development centers there and giving folks more options apart from AMZN, GOOG and MSFT.
In any case best of luck with your move. You may want to drop by Noisebridge in SF sometime, you might enjoy meeting some of the people there. Since you're in Palo Alto, there's also Hacker Dojo near you as well.