"Sugar Labs will focus on providing a software ecosystem that enhances learning on the XO laptop as well as other laptops distributed by other companies," Bender said in a statement. "Consistent with the OLPC mission to provide opportunities for learning, an independent Sugar Labs Foundation can deliver learning software to other hardware vendors and, consequently, reach more children."

In a statement yesterday, Craig Mundie, chief research and strategy officer at Microsoft, said, "By supporting a wide variety of affordable computing solutions for education that includes OLPC's XO laptop, we aim to make technology more relevant, accessible and affordable for students everywhere." The statement said that customers and partners worldwide have requested Windows support for the XO laptop, to tap existing Windows-based educational software and tools.

Microsoft has spent more than a year developing customized drivers that enable Windows to run on the XO. As a result, Windows now supports the laptop's e-book reading mode, Wi-Fi networking, camera, writing pad and custom keys, power-saving features, and other hardware.

But the deal marks a sharp strategic reversal for OLPC. Early on, Negroponte had talked to Microsoft about using a version of Windows on the XO, but Microsoft and Intel had criticized the laptop's small screen and relatively tepid processing power.