We learned more about the deal this afternoon from the two companies involved in the deal: It is indeed a patent covenant arrangement, which the company told BetaNews is similar to the one Microsoft reached with Novell last year. "Xandros will now be able to employ Linux in their future products with the assurance that intellectual property is valued and respected, while their customers will have intellectual property peace of mind," a spokesperson for Microsoft's intellectual property team wrote to BetaNews this afternoon. "Through this agreement Xandros and Microsoft will focus on improved systems management, server interoperability, office document compatibility and patent assurance."

Xandros will also be joining Microsoft in the production of document conversion functionality between Open XML and OpenDocument Format, which is another step Novell took in its agreement last year.