Although the blogosphere would have you believe Microsoft's recent attack on Google's copyright policy is a big deal, the truth is there's not much there there.
Quick and simple: 1) Microsoft has two competing book scanning programs (Live Search Academic and Live Search Books), and 2) Microsoft's business plan is not based on economies of scale of copyrighted works. Google's is.
Furthermore, what Microsoft's counsel said -- here's the full speech -- has been said multiple times in multiple ways by the Association of American Publishers, The Authors Guild, and various and sundry other organizations that disagree with Google's stance on copyright. Fact: Microsoft has been griping about Google's copyright stance since Microsoft helped form the Open Content Allance in 2005.
So if you're looking for evidence that the two companies are about to strip to their long underwear and get their smack on, think again.
Yes, Microsoft doesn't like Google's copyright stance. But you already knew that. For a good and recent overview of the conflict, see this Washington Post article.