I'm sure they didn't intend what they wrote to be used like this, but
here is the page where Microsoft explains in what way it sees the GPL as being viral.
But it also happens to explain how the GPL blocks SCO from any code distribution with a license on top (note the second bulleted item). Later today, we'll find out if they plan any distributions or not, or if they have another scheme in mind, but Microsoft has correctly explained how the GPL blocks any license on top of it. It also debunks the "we didn't release under the GPL because we didn't know our code was in there", the "pregnant cow" argument:
The GPL permits unlimited free use, modification, and redistribution of software and its source code, but imposes three key restrictions on every licensee: This is, of course, classic MS FUD. As we pointed out before the restrictions of the GPL only kick in if you are distributing software, not if you are merely using it. And as David Mohring correctly points out in his comments, a company that wishes to dual license [its own code] can also do that. An example of that would be StarOffice, which you can buy as a proprietary version or get as a GPLd version. But my point was simply this: by their own logic, the pregnant cow argument fails.
-- If the licensee redistributes any code licensed under the GPL, it must guarantee availability of the code for the entire work for unlimited replication by anyone requesting it.
This third restriction is what makes the GPL "viral", because it causes GPL terms to apply to software that incorporates or is derived from code distributed under the GPL, regardless of whether the program's developer intended that result or even knew of the presence of GPL code in the program. Violation of these restrictions may subject the offender to civil and criminal penalties for copyright infringement.
-- If the licensee redistributes GPL code, it may not charge a licensing fee or royalty, but may charge only for distribution costs.
-- If the licensee includes any GPL code in another program, the entire program becomes subject to the terms of the GPL.
Microsoft does not oppose the use of the GPL by individual developers, but does want developers and researchers to be aware of risks and restrictions they may face in using or developing GPL software.