Windows Phone 7 seems cool, and there are rumours about Apple using Azure and AWS for iCloud, and now stuff like this. New hobbyist and start-up interest is exactly what M$ needs, so I'm glad they're doing things like this. Hopefully they have the infrastructure and support to match.
I think it's good they're showing that they kind of "get it". Microsoft is huge at the enterprise level but they're really leaving out all of us little guys who are into open languages and software. They've been really uncool for a long time and I know we shouldn't judge a company by how trendy it's tech is and I also think that there's a lot of people using obscure or trendy languages just for the sake of being different and trendy as well but the fact of the matter is that now there are enough people clambering for this that they can't ignore it.
On the face of it, to an outsider it would look like the majority of the startup and open source community were like a bunch of hipsters who think PHP is lame, Ruby and Rails is so awesome, using NoSQL over traditional relational DBs gets you major street cred, etc. I can't knock it either because I use the tools all the cool kids are using too.
So on the one hand I think it's cool that MS is getting into the whole "web apps running on cool hipster tech" game (while still pushing their own stuff though you can kind of tell they know it's kind of lame to some of us). On the other hand, I still can't quite bring myself to think of Azure the same way I think of Webbynode, Heroku, AWS, Linode, and others.
I'd also add, on another note, that trying to get something as simple as an AMP stack on Windows up and running seems to require jumping through far more hoops than necessary. It's just always been a pain to work on the web using Microsoft infrastructure. That's the biggest reason I won't be trying this out for a looong time.