Oh Microsoft, this is why we like you and not say Sony or Apple, who take a different approach to jailbreaking.
Long Zheng and Raphael Rivera of ChevronWP7 met with Microsoft, including Brandon Watson to go over the whole jailbreaking thing, making the Marketplace more secure and discussing the future of Homebrew.
No details on progress was given, but at least the ChevronWP7 team got some t-shirts for their effort. Lulz.
Edit: Chris Walsh, the 3rd member of ChevronWP7, had a visa issue preventing him from physically being at Redmond, but he lets us know that he's there via video conferencing. Touche, Chris!