Microsoft Presspass (microsoft.com):

Microsoft Corp. today announced its intended acquisition of Kidaro, a leading provider of desktop virtualization solutions for enterprises. In combining Kidaro’s virtualization technology with its suite of desktop management tools, known as the Microsoft Desktop Optimization Pack for Software Assurance, Microsoft will enable IT professionals to optimize their desktop infrastructure by providing management capabilities for Virtual PCs, streamlining deployments and easing application compatibility issues.

“The acquisition of Kidaro is an important component of our virtualization strategy, and it delivers a powerful new tool to help enterprise customers optimize their desktops,” said Shanen Boettcher, general manager of Windows product management at Microsoft. “Virtual PCs can help businesses address a number of challenges around application compatibility, mobility and business continuity. Kidaro’s seamless user interface and management capabilities allow enterprises to more easily use and manage Virtual PCs. Incorporating Kidaro’s innovative solutions into the Microsoft Desktop Optimization Pack further enables virtualization across the enterprise, and is another example of how we are helping customers keep up with the changing needs of their business.” …

Read more at source 

What is Kidaro(www.kidaro.com):

Kidaro delivers innovative virtualization solutions to address desktop computing challenges at an enterprise scale. With Kidaro, you can deploy secure, corporate-managed virtual desktops that run locally on enterprise or 3rd-party PCs, enhancing IT agility while eliminating cost and risk.

Kidaro’s Managed Workspace product allows enterprise data and applications to run within a "transparent virtual machine wrapper." Kidaro’s product is built upon Microsoft Virtual PC, and the wrapper provides "enterprise class" management, deployment and a clean user experience. You can read more on Kidaro’s site. With this acquisition, the wrapper becomes Microsoft Virtual PC.
(Microsoft Virtualization Blog: http://blogs.technet.com/virtualization/)

Kidaro was the only one offering a virtualization agnostic product plus two fundamental capabilities that Microsoft can further enhance and leverage: the seamless window (just introduced with Windows Server 2008) and the VM image streaming (which could be combined with application streaming).

Kidaro’s mobile desktop virtualization platform leverages a choice of industry-standard virtualization engines (e.g., VMware®, Microsoft®, this will probably brought down to Virtual PC(Microsoft) only) to create a corporate-managed encrypted workspace, delivered for local use via DVD, over the network, or for ultimate mobility, via the Kidaro ToGo™ virtual desktop on a USB flash drive. All virtual machine management, deployment, and policy enforcement is automated and centrally controlled. This allows IT groups to manage a single virtual desktop, instead of managing thousands of unique desktop images and hardware configurations.

Microsoft plans to offer this technology only through the Desktop Optimization Pack (MDOP) like it’s already doing for Application Virtualization (formerly SoftGrid).

Competitors:

VMware ACE

Sentellion vThere

Sentillion mainly focusses on the Healthcare business servicing specialized apps.

vThere provides caregivers with a client-hosted virtualized clinical desktop that is identical to what they use inside the hospital. Caregivers can remotely access all of their clinical applications while maintaining patient privacy and data security exactly as if the caregiver were physically in the hospital.

vThere has three primary components: an admin station/Image Creator for generating customer VMs’ vThere.net to host customer VM image repositories; and the vThere player, a tweaked instance of Parallels workstation running on top of a Windows platform.