I agree with the drug-dealer comment. IF Microsoft can get a trimmed-down version of Windows XP working on an OLPC, then they'll probably sell it at $3, just like in China. THAT is the drug-dealer hook. Once they get the students used to using Microsoft, and have all their data in a proprietary Microsoft format (e.g. OOXML) the prices will rise until, like here in the States, the cost of software will far exceed the cost of the hardware.
The OLPC was designed from the start to be a low-cost computer. It's supplied with a minimal amount of semi-permanent storage, in the form of flash memory. It's also supplied with a low-power processor so that it can be recharged by hand, rather than require a dependable electrical grid throughout the region of use. That storage is big enough for a distribution of the Linux operating system and a few critical applications, such as web browsing, email, and word-processing. It is NOT a large enough storage nor a fast enough processing platform to support bloated software.
I have to wonder what Microsoft intends to remove from "XP" to make it OLPC-compatible. They've testified (under oath) that everything there was necessary. Either they lied <feigning shock> or they're expecting to dress-up an even older version of Windows (say, 98SE?) to LOOK like XP, or they will expect users to "upgrade" the OLPC with extra flash memory and faster processor to run it.
Whatever the case is, I'd bet that the "applications" will be web-based, which really WILL lock the users into paying ever-increasing taxes to see their own documents. Why have a web-based application if you're going to store the data locally? No, no, no... Store it up on a Microsoft server, where it will be "safe" and you'll always have access to it. "Oh, did we forget to remind you that there will be a fee for storage? Gotcha!"