This is how I understand it: basically, XMPP is like an email address. There's no central server and anyone can run a server.

Microsoft doesn't support federation (which is what the server to server communication you refer to is called)

Additionally, they have a proprietary version of OAuth 2 and check for an API key that tells them you're running Windows Live Messenger for Windows, complete with the spyware and obnoxious advertising it includes.

It's basically just MSN with a XMPP-like protocol instead of MSNP. It doesn't get you any of the features that real XMPP has.

The Telepathy instant messaging framework has managed to reverse engineer this and implement it, but it is only a new way to use MSN, it is not, repeat, NOT legitimate XMPP.

btw, that reply was from me

I say bad things about Microsoft sometimes, they're all true, you can even verify it all for yourself. It will probably get me banned though, since DuckDuckGo is very Microsoft friendly.