However, the article is misleading when it talks about "rule changes".
>>"We tend to have strict moonlighting rules," he said of the company."But we’ve changed those rules so developers can do this in their spare time"
>>MICROSOFT’S new rules fit into the broader rethinking of how large companies manage research.
For most of the past decade, Microsoft had fairly liberal moonlighting rules. You could start your own business and work on it as long as you didn't see a conflict of interest with your work at Microsoft.
In the 90s, manager approval was required for moonlighting. For most or all of the 00s, you didn't even need to inform your manager about moonlighting (unless you saw a potential conflict of interests)
These rules aren't new (and have nothing to with WP7). In fact, many of the people I know used these liberal moonlighting rules to write iPhone apps in 2008. Some of them are still at Microsoft and some of them quit Microsoft after their iOS business did well.