Doesn't it read a bit more like they're trying to block google analytics? Not that they're taking a direct shot at any particular company of course... maybe I'm just overly paranoid.
I don't think so. Google Analytics tracks many visitors to the same site, whereas this seems to be aimed at preventing tracking of the same visitor to many sites. In the MS blog it says it'll prevent the same cookie tracking you across more than 10 sites. I think the implication is that it's bad for Adsense, Doubleclick and the like as they can no longer track you through third-party cookies on dozens of sites and build up an advertising profile of you that way.
Good for privacy of course, but as so much of the web is ad-funded is this really going to be good for the web as a whole ? I guess we'll have to wait and see on that one.
I think it's interesting also that this is happening as Microsoft tries to become a bigger player in the internet ad business. They could use IE feature to their advantage here, as it'd be fairly easy for them to implement a scheme where all third-party cookies are limited, except for those of Microsoft and its "selected partners". Would we put it past them to do something along those lines ?
I've noticed several design suggestions in your code.