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Windows Live running its blogs off Wordpress, on Linux with MySQL?

It doesn't get any better than this. Chairs will fly.

No, that's not what's happening. Microsoft is migrating these users to Wordpress.com, an existing hosted blogging service. They're getting accounts there and their blog posts are being imported. Microsoft isn't running Wordpress.org software.
still, I will say that it is a victory for open source community!
Microsoft has been doing this for some time. Outsourcing and linking to services that people are using. Windows Live is integrated into a LOT of services. It's actually pretty nice. They plug into these systems that already exist, and leverage them for their own customers.

It's really smart.

I agree it's smart.

But that doesn't change the fact this platform is, from top to bottom, everything Microsoft has been criticizing and sabotaging for the past decade: GPL, Linux, MySQL...

It's like Google deciding to do search through Bing...