Claims that the One Laptop Per Child project and Microsoft had partnered to put Windows XP Starter Edition on the laptop have turned out to be false. According to Walter Bender, president of Software and Content at OLPC, there is no agreement in place between OLPC and Microsoft to offer XO laptops with any version of Windows. Bender also indicated that Microsoft has not contacted OLPC regarding its $3 software bundling program, nor have any governments requested that the XO be outfitted with Windows.
Microsoft may be one of over 1,500 developers accepted to OLPC's developer program, the company does have access to XO prototypes and has said that it will develop for the XO laptop. However, when asked if OLPC was aware of any tests of either XP Starter Edition or Vista Starter Edition on the XO, Bender said that he was not.
News source: Ars Technica