Most of the commentary around the Microsoft settlement with Sun focuses on Silicon Valley making peace. This perspective made the front page of the Sunday New York Times. It is certainly to the credit of Sun (and Apple before them) to make their needs the center of the universe even while Microsoft dominates their markets. The more interesting question is why Microsoft paid so much. It is not very insightful to say 'because they can afford it.' Microsoft has been reaching out to the Valley through the efforts of Dan'l Lewin among others for the past three years, for purposes well beyond settling lawsuits.
Part of the reason may be in Steve Jobs' long-time perspective that Microsoft does not innovate, it copies. (As he put it, good artists copy; great artists steal. Steve puts himself in the latter category, Microsoft in the former.) Microsoft spends incredible amounts on R&D with much less to show for it than the cauldron of innovation driven by the venture capital industry. Hence watching that cauldron closely makes sense. But this is unlikely to be the whole story.
Microsoft is much more threatened by the EU antitrust commission, and the US Government before them, than Apple or Sun. Indeed, having made those companies little more than sideshows in the market, it finds itself in the position where their continued existence is of more importance than their competitive threat. Simply put, it gives Microsoft antitrust air cover to show alternatives in the market, however marginalized they may be. Hence the payment to Apple of several years ago, and this reapproachment with Sun.