Pretty terrible news for Microsoft. The first thing I did was have a look at Mary-Jo Foley's blog, and as sure as night follows day, there is definitely contrition in her article on this matter.
Her Lois Lane antics have resulted in the loss of one of the most able guys steering the mothership. Yes she got her 5 minutes, but at what cost?
Anyway, with technology companies on the increase, companies will be clamouring to secure him, there is only really one loss, and that is the company he leaves.