This has been bugging me for a while, its all over the tech side of the web, and everyone seems to have an opinion about it, so here's mine. It's nerdy stuff, so stay away if you're not that way inclined 
For those who don't know the what the whole ODF/OOXML fiasco is, here's a short rundown (google it for more info). The OpenOffice guys decided a while ago to create a set of new XML-based file formats for office documents, collectively called Open Document Format (ODF), and to standardize it so the data in the files is not locked into OpenOffice, i.e. other people could make programs that read those files easily.
Microsoft had a similar idea at a similar time, and started doing the same, collectively called Office Open XML (OOXML), mainly because governments were demanding it. While Microsoft were busy trying to get Microsoft Office 2007 out the door, the more nimble OpenOffice guys got ODF out the door and passed the major standard bodies first. So when Microsoft Office 2007 was released, they faced a challenge when trying to standardize it because there was already a standard.
Microsoft of course did not back down (and still hasn't even after they lost the initial ISO vote), continued forward, and insisted that the two standardized document formats can co-exist. The ODF guys got really pissed off, punches were thrown, the FUD machines on both sides went into overdrive, bribes were apparently made, voting was apparently tampered with, and personal death threats were even issued.
The ugly side of the technology world came to light, and personally I think its quite disgusting. It's one thing to spread FUD and offer bribes (and that's bad enough), but death threats are a completely different level altogether, one that should never have been reached. It's amazing how riled up people can get over file formats - I sometimes wonder what they people are like in real life; I'd like to think they're all creeps and look like a murderer's mugshot so at least its somewhat understandable, but I would not be surprised if they were your typical family guy, with a wife and 2 kids. Anyway, I digress.
Here's what I think. Microsoft cannot adopt ODF as a first-class citizen in Office even if they wanted to because ODF doesn't cater for everything Microsoft Office can do. And the ODF guys will never accept all the submissions to make it cater for all of Office's features (and backwards compatibility), because that completely undermines the community direction behind ODF, and because some Office features won't fit in to the rationale of ODF, instead bloating it. That's all completely reasonable, after all the reasoning behind ODF wasn't to standardize Office's file format, but to create a new, practical and usable file format for documents.
Even if Microsoft could adopt ODF, they wouldn't because it makes little commercial sense - they'd have to reveal any new features that require changes to the file format before their product release, meaning their competitors could copy it (at least the idea, if not the implementation). Remember, their entire product relies on this file format, unlike the something like an image file format which only form part of the product does. The exception of course is if they time the file format spec release to coincide with the product release, but I doubt that's reasonable for a standard.
So standardizing OOXML is really just paying lip-service to the idea of a standard document format. What should've happened is this:
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Microsoft should've released the spec to OOXML using a licence that permits reimplementation for all publically. Don't bother standardizing it because that's pointless and everyone can see that.
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They should then implement support for ODF as much as possible, allowing users to use it as the primary file format in Office if they wish (make an 'ODF mode'). For features that can't be implemented in ODF right now, disable them in the UI - after all, similar functionality exists when you default to an older Office file format anyway. Submit new features to ODF, and implement them when ODF supports them.
This way those who require a standardized file format (ODF) can use it, and those who don't can use OOXML and get all the features. Other programs can implement OOXML support using the Microsoft-provided spec if they want to (as many already do). Most people couldn't care less if their document file format was standardized anyway, so they can stick with OOXML and use all of Office 2007's features. OOXML may even become the de facto standard.
Yes I know this somewhat undermines the idea of having a standard file format for documents, but it is a compromise that will work to benefit of both parties. Having a standard file format for documents and competing office suites using the same format is an idealistic idea that is unlikely to work in reality. Although it is very beneficial to the consumer, it in many ways removes the ability for a commercial company to be rewarded for its innovation, especially in this case given a document file format dictates essentially what an office suite app can do; the only difference will be how each competitor does it. Therefore the industry stagnates, profits fall, companies leave, and consumers ultimately lose out.