Microsoft's stated goal is to make HD Photo into JPEG XR -- a standard they won't control. Microsoft promises a royalty free grant to patents they hold.
I'm not exactly a Microsoft fan, but I'm hoping this one works out. JPEG is really inadequate (though if you shoot raw, edit the raw, and save as JPEG you can get around some of JPEG's worst limitations), but JPEG 2000 seems to be stillborn.
I was really hoping JPEG 2000 would work, but I've read that it probably contains lethal patent bombs. (Patent holders will stay silent until JPEG 2000 is well used, then attack.)
Crow's posts also include a dense discussion of color spaces and gamma. I've read this stuff before (see also: one, two, three), and discussions come in two flavors: wrong and impenetrable. That is, most of the discussions are misleading, but the reliable ones are very dense. I'm convinced not a few famous manufacturers and programmers have messed up their color profile support because the topic was too complex for them to understand. (Trust me, very large companies can have a lot of trouble with complex topics.)
I'm disappointed though that Crow doesn't discuss metadata and HD Photo. Exif headers in JPEG have been extremely valuable -- even though there's no real standard. A wikipedia article on JPEG XR has more information:
PNG, metadata and archival formats).
If Microsoft pulls this one off as an honest broker (the devil will be the details of those patent grants) I'll have to say something nice about the Devil.
Update 1/9/10: Sadly, Microsoft waffled on its licensing. So they were true to their satanic heritage.