Well I dont see anything about it on http://research.microsoft.com/ ...doesn't mean it isnt true although it seems a bit fishy.

>Carl Warner of VFUG sent me this link. Does anyone know anything about this or is this another hoax?
>
>Microsoft hasn't confirmed reports that it is developing a new
>data-centric programming language, but one expert believes it's a
>no-brainer because such a language -- rumored to be called X# at
>Microsoft -- would make the software giant the first major company to
>embrace functional programming. It's a concept that could not only
>fundamentally change mainstream development; it could also make XML
>Web services data easier to work with.
>
>searchWebServices.com:
>http://searchwebservices.techtarget.com/originalContent/0,289142,sid26_gci873910,00.html