Here's a link to the early history of Java.

Microsoft did license the language and created their Visual J++ programming environment. Visual J++ used an integrated development environment (IDE) that was almost identical to Microsoft's other develoment environments. The first VJ++ releases were pretty much straight Java. Later, Microsoft added some proprietary extensions to VJ++ that made it easier to write Windows applications. These extensions were purely optional. If you used them, then your code would only work on Windows systems. If you didn't use the extensions, then your code was straight Java. I used the VJ++ IDE for 2 years while developing CCAT (see other post on this threat about "Write Once, Run Anywhere") and never used the Microsoft extensions because our code had to run on multiple platforms.

Sun sued Microsoft over those extensions. If memory serves, Sun won the suit. Microsoft decided that it would no longer include the Java runtime in their Windows distributions but made it easy to add Java support if the user wants it. Microsoft didn't stop Java from running on their systems, they just decided they weren't going to include it in their distributions. Since Windows is Microsoft's product, they should have the right to decide what is and is not included in the distribution CDs.

Anyone who needs Java support can get it free of charge. It's no different from all other add-ins that are available on the Net like media players, Adobe Acrobat readers, and the like.