|Microsoft (contrary to most of their corporate history) intends to make its identity technology, CardSpace, interoperate with lots of other identity projects. This announcement embodies that far-sighted approach.
Here's what it enables (from Seattle PI) :
After users type their identifier into a participating site, they're momentarily redirected to their chosen OpenID Provider. They need only remember the name and password they've set up with the provider. That provider, in turn, sends the participating Web site an encrypted message, known as a token, confirming the identity of the person logging in.
For a meatier description of this announcement (plus other partners), see Kim Cameron's blog entry (Kim being MS's chief identity architect).