They just made themselves look real bad.
They are portraying themselves as the underdog. Fighting the machienes, "the man". They are admiting that Linux is a HUGE threat.
Think about this,
There are only 2 divisoins of M$ that actually make money. They're MSN web crap and they're software end. MSN only makes a few points profit. The software end makes over 400% profit. Shows you that they're charging an arm and a leg for they're software and don't need to. With Linux taking the market the way that it is, M$ could be in real trouble. If they loose they're software end they don't have a leg to stand on.
Remember Longhorn is costing M$ almost half of they're spendable cash. If that tanks, they still have a lot of money, but less then they fell comfortable with.
This Matrix thing is a cheap attempt at making Bill and the rest of M$ look "hip". The only thing it did was make them look sad. They should spend the money it took to make that flick and better they're code.
For the record, I predic that M$ will loose a LOT more market share and within 10 years release a Linux Distro bundled with M$ Office for Linux. This will be the only way they can attempt to make money.