I don't always follow the logic or completely understand all the implications but...

If this all boils down to without proper M/S licensing, embedded Linux can not interact with M/S products, isn't this a trade restriction?

I mean, a customer could chose a linux device for it's features and benefits over a M/S product (a free market choice) however, might not be able to manage this new linux asset without first changing the OS that was bundled (not very free market) on the laptop that he already owns.

Yup, now imagine a future where every seat back has a device in the headrest and every automobile has at least a PND in its dash.

Microsoft plays for keeps and its Sync product is pro'ly expected to generate big bucks.

Didn't Gates say once that his goal was to put M/S on every desktop @ work and in the home or somesuch? We all know how aggressive and successful M/S has been in pursuing that goal.

Microsoft has simply added the words (among others) car and dashboard to this mission.