Agile Development at Microsoft
Chris Lovett, who works in our XML Team (within the Data Programmability team) has been interviewed discussing the process used for the development of XML Notepad (an unsupported tool released by the team last month - you can download it here).
The team used an "Agile Development Process" - what's that?
"it's a highly iterative process. We prototype the idea, show it around, get feedback, lots of hallway discussions, great feedback gets incorporated into the next iteration and so on, until we reach the point that we think we have the right set of features to call it done. So it's a light weight process with a small team that can move fast and respond quickly to feedback."
More details at the InfoQ article (a new site by the way, worth subscribing to if you're into dev stuff).