@ anand:
"I'm not too sure about that. There are plenty of companies out there (classic example, startups) that would go with the open (and often free) route to getting their offering off the ground. Also, OSS developers don't develop their product with a particular business model or idea in mind, IMO."
The main problem is, what's also described by a person earlier in the comments: devoting time to an OSS project is effectively eating away time to do commercial work. if you have to pay some bills, you better have some other sources of money, otherwise you can't work on OSS software, at least not with a lot of time.

So what happens? In java land for example, companies pay large groups of developers money to work on tools for java which are open sourced. The companies then sell services on top of these tools/libraries/servers. So to be able to do so, they provide their own platform for their business model by providing the open source stuff they release.

In .NET land, an ISV who wants to use this model runs into a big wall, which I've described also here in a blogpost I made in last december:
http://weblogs.asp.net/fbouma/archive/2006/12/11/the-reason-why-oss-isn-t-big-in-ms-net-land-money.aspx
and which is that on average, the .NET targeting developer thinks along these lines:
1) the time I put into something has to be payed
and
2) if I need something from a 3rd party, I look for a commercial offering, or use MS' tools (first choice)

Maybe some OSS developers start their project just to get started. However as soon as something begins to become successful, you have to provide support, fix bugs, add new features etc. etc. 10 to 1 the vast majority here has never contributed a single line of code to any open source software project and only uses the open source products because they're ..... free (as in beer). When you have to spend time on supporting your OSS project as no-one else does (and believe me, even if a lot of people use your stuff, just a tiny little fraction actually provides patches and new features), you'll have to make a choice:
1) drop it
2) go full scale for it and get some money via other routes

Now, you might argue: this action from Jeff and others can help with 2), but that's not true: there are more than just a couple of projects out there which have some followers and support can become rather intense pretty quickly.

Furthermore, make no mistake: Mono and for example NHibernate are projects owned by a big company (Mono by Novell, NHibernate by JBoss which is owned by Red Hat): you want to donate money to these big corporations? Why? Invest it in tiny projects like NDoc, and even then... it's better to provide a better eco system where Microsoft doesn't step on initiative from the community and simply supports OSS tools out there which are used by more than a few people (like nunit, nant etc.) instead of rolling their own copied incompatible version.

However no sign on the horizon from redmond that you will do that. On the contrary.

"I'd have to agree with you - but that's something I'd like to change. "
I appreciate the initiative, but unless MS changes its own business model (from ISV to service provider) you'll likely meet a lot of closed doors, simply because what MS doesn't control is a liability: vs.net is a commercial product, relying on a 3rd party app is making things vulnerable inside itself, so MS has to roll its own.

You come with an example where MS provides the source. Great example. The thing is though: that's NOT what should be changed. MS should work _together_ with open source projects started by others, outside MS, and make sure these project don't hit a wall because MS thinks they have to do their own copied version of the same project. Until that changes, there's no OSS eco system on MS platforms simply because there's no start with the change of mentallity with the average developer using .net dev tools: they then still will see MS' only tools and if MS doesn't have it, they'll still look for commercial offerings. It's what MS calls the '3rd party oppertunity' which is still there but the particular 3rd party is in most developer's minds a commercial ISV.

"Just to set the record straight - Sandcastle will be released."
No offence, but how long is Sandcastle still in pre-beta stage? How long till some toolkit is released which benefits every single developer out there? It's not that the commercial offerings don't work, it's just that IF you want an eco system for OSS tools, you should support a community OSS offering which was already there: NDoc, not release something of your own. Because by doing that, you will effectively KILL precisely what you want to build up: why would new developers try to re-animate ndoc if MS comes with sandcastle? The answer to that question should be the direction into which MS should look. :)

Oren, I wasn't trying to offend you, if I did, sorry for that. My point was that if the NHibernate projects needs money, the project owning company (Red Hat) should provide that money. It's not for nothing that they employ the main developer (which IMHO is a way to support the project with money and to guarantee there's always at least one developer full time on the project, precisely what this initiative tries to accomplish for other projects. It's now up to the mind change inside the heads of all these Morts out there ;))

Open source doesn't need money to become solid, it needs attention. Just throwing money at open source is what MS is doing for years and it hasn't payed off. The reason for that is that the mentality of the average developer on MS platforms is that you simply pay for controls, libraries and tools and if you work on these products, you get payed.

You won't hear me complain about that mentality, as an owner of an ISV which targets .NET, I like that mentality from a business POV and with me all the other ISV's which do the same: target .NET. :)

For open source, that mentality isn't that great: less people are interested in devoting large piles of time to a project and when it's released, the majority of developers often won't even think about looking for an OSS alternative to commercial offerings.

THATs what's lacking in the MS' ecosystem for open source. You can throw money at it, but that mentality won't change. One of the core reasons it won't change is because MS won't let it be changed: if it does change, their days are numbered.