you are, of course 100% right on all counts...
Someone speculated about what might become of Java if Sun were to fold...perhaps IBM would pick it up, and that might make it more attractive for Microsoft.
With the advent of .NET and C#, though, I think Microsoft has little use for Java in any form. Tis a pity imho...it's a very sweet system in many ways.
I agree with you about Sun being very foolish in its dealings with Microsoft for a long time. I've often cursed them bitterly for it.