Microsft licensing Windows for $10 with Classmate PC?

According to an old blog post (dated April 09, 2007) in the One Laptop Per Child News site, Microsoft is bundling Windows with the Classmate PC for as low as $10. The article, How about OLPC XO and Classmate PC?, is written by one Luis Ramirez, a member of the committee in charge of the citizen-led campaign One Computer Per Child in Chile

Among others, it claims that:

"Yes, you can order (if you are a school owner, such as the municipality) all your Classmates with Linux. However and here is the surprising news: The selling price is not very different to the windows version, because Microsoft sold the Windows licenses at a very low price, - at least we were told so by the Intel executives we interviewed.

Not sure what they meant by that, but apparently it's around ten dollars (I'm trying to get this info). The key issue here is the ‘popularity contest' (already won by Windows) behind adopting a Linux based system if such a decision will be in the hand of local authorities or even the national Ministry of Education. With all its obvious strengths, Linux is a geek mantra, not a politician or Ministry of Education mantra.

Only extremely visionary politicians have understood that in this part of the word. Thus, after the arrival of Classmate, those advocating for a ‘Linux Generation' produced as a consequence of a massive implementation of OLPC in schools are feeling fairly skeptical, again..."

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Hmm. So I guess that is how Microsoft intends to fight back.