Today, we are announcing the availability of three new template Shared Source licenses. In this way, all of Microsoft source code releases will be under consistent terms, and thus more easy to use and to understand. The licenses are each 1 page or shorter. They are written in simple terms that non-lawyers should be able to follow. They are also reflective of the most modern thinking regarding source code licenses within the legal community.

The three licenses are: (check out www.microsoft.com/sharedsource for more info)
1) Microsoft Permissive License (Ms-PL)
2) Microsoft Community License (Ms-CL)
3) Microsoft Reference License (Ms-RL)

The Ms-PL is the least restrictive of the Microsoft source code licenses. It allows you to view, modify, and redistribute the source code for either commercial or non-commercial purposes. Under the Ms-PL, you may change the source code and share it with others. You may also charge a licensing fee for your modified work if you wish. This license is most commonly used for developer tools, applications, and components.

The MCL is a license that is best used for collaborative development projects. This type of license is commonly referred to as a reciprocal source code license and carries specific requirements if you choose to combine MCL code with your own code. The MCL allows for both non-commercial and commercial modification and redistribution of licensed software and carries a per-file reciprocal term.

The MRL is a reference-only license that allows licensees to view source code in order to gain a deeper understanding of the inner workings of a Microsoft technology. It does not allow for modification or redistribution. This license is used primarily for technologies such as development libraries.

Jason Matusow's Blog (MS Shared Source Office)