Possibly the worry from MS's point of view is that linux/BSD/etc.. won't be considered part of the market from a legal point of view. I mean I think it should be but I don't know what the law is.

A more likely answer though is the following. Linux threatens MS in particularly lucrative areas (servers and backend systems). Moreover, the unix software culture and software ecosystem means that few linux servers will run the various DB and backend MS software solutions.

Also, MS likely realizes the important role the developing world will play in software sales in the future and the threat that a totally free OS provides. OS X, MS likely assumed, would face too high a barrier to entry to ever get really popular (who wants to spend thousands on an OS that you find unfamiliar and are unsure if it can do what you need?) but that a free OS would be tried and gain a foothold.

Moreover, MS may think that linux's low desktop penetration means that it wouldn't provide much legal defense in the first place.

I love how some of these reports describe the cut as "eerily" similar to the earlier ones. Doesn't seem eerie to me, just evidence you should keep your cable lines farther apart.

Alternatively one option you might want to explore is alternative financing arrangements for these computers. I mean I suspect the reason that filters are required is that these would be state owned computers.

I encourage you to think about finding a private company that would lease these computers to the students with the understanding that at the end of the lease the student or failing that the state would have the option to purchase at a specified price. This might let you make an end run around the legal requirement for filtering.

Regardless of your stance on filtering content for students this is wise for several reasons.

If you put filters on these computers then you or the school will be blamed when kids access inappropriate content. I mean after all you put the filters there to stop the kids from accessing such content so it's your failure when they do. Someone will manage to access inappropriate content (either b/c of bad filters or clever hacks) and then the program gets blamed.

On the other hand if the parents view these as simply computers provided to them as a school supply they will be more likely to assume responsibility for policing their children's behavior themselves.

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Finally, I would point out that people tend to act the way they are expected to act. If you put up a bunch of filters against looking at inappropriate content you communicate the expectation that this is what they would do without the filters and they will proceed to act in accordance with that expectation and circumvent filters.

First of all why would you want to stop children from doing the social activities (myspace etc..) they would enjoy on a computer? Not only are they reading but they are learning to like computers, and socializing. All of these are valuable for children.

Now as for the obscenity/filtering issue things get more complicated. While a bunch of people here will tell you not to filter at all you have no legal choice and if you don't appear to be trying you risk getting shit from parents who stumble on their kids looking at porn.

As far as the filter you need to realize that no matter what you do if the kids want to get around it they will succeed!

I remember dealing with the locked down computers in the school computer lab when I was in school. Not only did I circumvent them but I of course immediately told my friends how do so and word spread to everyone who used the machines frequently. Not to toot my own horn but these weren't trivial hacks but since I didn't care (I had a computer at home) I also let the guy running the computer lab know so he could go tell the software company to patch things (made it more fun). The point is that filters will be circumvented.

Now one approach is to simply make the filters as unobtrusive as possible to minimize the incentive the kids have to circumvent it. The best you can hope for is that it's not worth the bother for anyone but the couple of wanna be computer berds at the school.

Ultimately though I suggest you talk to a lawyer and the political people at the school. This isn't a technical question. Your filters will fail, the question is what do you need to do to be legally and politically protected from any fall out if this occurs