I posted on this earlier in the year, but I thought it was worth repeating, as I've seen a number of threads lately that question why Microsoft originally created Open XML rather than going with ODF. As you'll see from the timeline below, both formats were actually developed in parallel, and had very different design goals.

1998

• September - Beta version of Office 2000 released with HTML support in Word, PowerPoint, and Excel. XML was used for vector markup (VML); metadata; thicket manifest; and presentation information.

1999

• June – Microsoft Office 2000 released leveraging XML for a number of features within the HTML formats.
• Sun Microsystems purchases Star Division (maker of StarOffice)

2000

• July – Sun decides to open source StarOffice and calls the project OpenOffice
• August - Beta version of Microsoft Office XP released with XML markup via smarttags and an XML file format for Excel called spreadsheetML
• October – OpenOffice.org website goes live

2001

• March - Microsoft Office XP officially released with added XML support for representing spreadsheets and SmartTags
• Spring - Microsoft begins work on Office 2003, and plans an XML format for Word similar to the already released XML format for Excel

2002

• May - OpenOffice 1.0 released with default XML file formats
• October - First Beta of Microsoft Office 2003 released with a full XML file format for Word (wordprocessingML), custom defined schema support in Word and Excel
• November - Sun submits OpenOffice XML to OASIS for standardization. The first meeting of the group is attended by 17 individuals, and the average attendance over the next couple years is just a bit over 7.

2003

• April - Microsoft Office 2003 officially released.
• Summer – Microsoft starts development of Office 12 and investigates what improvements would need to be made to the existing WordprocessingML and SpreadsheetML formats for use as the new defaults.
• September - Microsoft joins with the Danish government to announce royalty free licensing of the Office 2003 XML formats and public availability of the schemas.

2004

• May - EU asks Microsoft to submit its XML formats to a standards body (http://ec.europa.eu/idabc/en/document/2592/5588)
• August - Brian Jones gets married and for the first time in years actually gets to spend a week not thinking about XML and file formats. :-)
• September – Brian Jones has to go back to thinking about XML and file formats.
• December – OASIS Open Office XML formats committee agrees to approve the specification and release it for a month of public review. This was done via an email vote and made official in one of the weekly conference call meetings (this one in particular was attended by 4 individuals).

2005 – busy year

• January – "OASIS Open Office XML Format TC" renamed to "OASIS Open Document Format for Office Applications TC" in order to show that the formats aren't just for OpenOffice.
• May - ODF approved by OASIS as a standard. Over the course of the past 2 years there had been 2 main individuals involved in the work (those who attended at least 75% of the meetings) and 4 others who were present for at least half of the meetings.
• May - Microsoft officially announces new default XML file formats for Word, Excel, PowerPoint. Brian Jones starts blogging about the formats.
• October – OpenOffice 2.0 first product available to claim full support for the OpenDocument file format
• November - Following EU's recommendation from May '04, OpenXML is submitted to Ecma international for standardization.
• November - Microsoft announces improved approach towards licensing of the Open XML formats where a license is no longer required. Open source lawyers like Larry Rosen voice approval of the new approach.
• November - ODF submitted to ISO
• December – Ecma TC45 meets face to face for the first time in Brussels to agree on the charter for the group and to begin work. The meeting is attended by 20 individuals representing 12 organizations. From this point on the TC has weekly 2 hour conference calls and 3 day face to face meetings every 6-8 weeks.

2006 – very busy year :-)

• January – Corel announces that it will support the Open XML formats in the next version of Wordperfect Office suite. They don't plan to support ODF due to lack of customer demand (although that will change)
• February – ODF Alliance created with the goal of marketing ODF to governments and public institutions
• April – KDE provides second product to claim support for ODF with release of KOffice 1.5
• April – Ecma TC45 has 3 days of face to face meetings at the British Library in London. At the meeting the TC agrees to release the first public draft of the OpenXML specification and to provide a mechanism for receiving public comments. The meeting was attended by 19 individuals representing 12 organizations.
• May – After 6 months ISO votes to approve ODF (ODF officially becomes ISO standard later in the summer). Microsoft was a member of the subcommittee that reviewed ODF, but raised no objections to the ISO approval of ODF.
• May – Gnumeric is first open source spreadsheet application to provide support for early drafts of the OpenXML SpreadsheetML format.
• May – IBM announces that Lotus Notes will use the ODF format. 
• June – Ecma TC45 has 3 days of face to face meetings in Sapporo, Japan (hosted by Toshiba). At the meeting the group agrees to release an updated public draft in order to get more up to date public comments. The meeting is attended by 19 individuals representing 9 organizations
• July – Microsoft announces that it is sponsoring an open source translator project that will translate from OpenXML into ODF and from ODF into OpenXML.
• September – Ecma TC45 meetings in Trondheim, Norway for 3 days and agrees to submit the final draft to Ecma international for approval. Attending the meetings were 21 individuals from 13 different organizations.
• November – Microsoft Office 2007 released and is first product to claim full support for OpenXML format
• November – Corel announces that by mid 2007 they will support ODF in addition to Open XML
• December – Ecma officially approves TC45 final draft as Ecma standard 376. The final vote was 20-1 in favor of OpenXML with IBM as the lone opponent.
• December – Ecma submits OpenXML to ISO
• December – Novell announces that it will build in support for OpenXML into OpenOffice

So, as you can see these formats were both developed over a long period of time. There were a number of lessons learned on each side, and of course the final results from each side are quite different given the differences in design goals. Folks on the ODF side wouldn't disagree with this. Gary Edwards, who played a big role in the ODF 1.0 standard and was one of only two people who participated in more than 75% of the meetings leading up to the completion of ODF 1.0 explains how interoperability with the legacy base of Office documents was actually blocked during ODF's development (read his comments under the post "Is It Game Over? – ODF Advocate Andy UpDegrove is Worried. Very Worried"):

Everyone on that first TC group supported full interoperability with Microsoft applications and documents, except for one company - Sun.

There are three areas of "interoperability" that Sun opposed then, and continues to oppose today. The only difference being that after their 2004 deal with Microsoft, Sun has been uncompromisingly determined to block the interoperability the marketplace demands.

…

If Micrsoft were to join the OASIS ODF TC today, seeking to adapt ODF to meet the legacy document-MSOffice features-line of business integration needs of their monopoly base, the TC would have to deal with the exact same issues as they have summarily rejected with current compatibility-interoeprability-convergence disussions!

There is no possible way anyone can claim that today's OASIS ODF TC would welcome Microsoft and make accomodating changes to the specification! No way! And the proof of this hostility can be seen in the actual disussions and rejections of Micrsoft specific interoperability proposals.

Both formats are valuable, and if ISO agrees to approve Open XML, we'll have the ISO guaranteeing that we'll always have access to the documentation.

-Brian