They are scared to dead with all things Linux. Like all Empires, they will have an end. Maybe this is the start of their self-destruction.... we hope.

Suppose MS were to follow through.

First, how does a mere user of free software "violate" a patent?
It would be quite unprecedented, not to mention stupid!

Second, MS would have to sue more than half of the Fortune 500 companies as the Linux user base is quite extensive in the corporate world. This would convert Wall Street from a bull market to a bear market in a hurry, and would place our entire economy into a recession.

Third, how would MS know who the "users" and "developers" are?

Fourth, such an action would literally take decades to resolve, also given the size of the Linux and FOSS communities.

This action is an obvious sign of FOSS success, and it spans across every platform. FOSS is favored in Corporate America because of the reduced IT costs, not to mention the in-house customizations of the software source made possible.

...and what about the Linux users in a residential environment?

Sure, we have two commercial UNIX dialects we can turn to: Mac OS-X and Solaris.

Linux has proven itself to be viable for home use, too.

Then again, if every patent, trademark and copyright were enforced like this, our economy would come to a complete stop, because nobody would be making anything, without having to worry about what they are stepping on.

Besides, hasn't MS violated patents on some of its own products such as Internet Explorer and Windows Media Player?

There is an old saying about that: He who lives in glass houses should not throw stones.

It is quite obvious what is really going on here.

After years and years of FUD from Microsoft, they now claim that all this "inferior, broken" software that they've been railing against is stolen from them... What does that say about their own products, if one assumes they're right? (Not that I do, which is why I've used Linux since 1993.)

We need to find a way to present the downside consequences of Ballmer's hard line (on Open Source / Linux) to all major analysts and Microsoft stock holders: in brief, Microsoft is being too aggressive, and so is putting their investment at substantial risk. Microsoft risks damaging its brand and losing goodwill.

As Etienne Wenger (guru of communities) has observed in another context (Iraq, see http://www.ewenger.com/personal/life_in_defense_of_goodwill.htm), "raw might is not a definite advantage. There are too many ways to undermine it, too many ways that it will reproduce that which it seeks to eradicate... the more blatant power you have, the more goodwill you need". Example: a British-based corporation lost that goodwill (thru their use of animals in testing pharmaceuticals) and a campaign began, aimed at influencing their major stockholders. While I am NOT advocating a similar campaign, there is a real risk that Microsoft will create a major backlash with unpredictable results. This could hurt everyone, them included.