Recently winnetmag posted this piece on C# and Xen (X#) and I felt like I had to respond.

Just What We Need--Yet Another Programming Language
I hope you've have mastered C# because Microsoft is working to replace it with yet another C-like programming language. Dubbed Xen (previously X#), the new language melds C# with XML and SQL Server support. To be fair, if Microsoft develops the new language correctly it will be a superset of C#, prompting me to wonder whether the company should market Xen as a new C# version. Otherwise, Microsoft risks alienating C# users as the company alienated Visual Basic (VB) users when it moved from the simple VB 6.0 language to the more complicated Visual Basic .NET.

Let's be clear here, Microsoft is not working to replace C# with Xen and we are not planning on productizing Xen.  We invest a lot of time and effort into research projects and Xen is an example of just that, a research project.  We will continue to fund language research projects and learn from them.  For example, the Microsoft Research download page lists several language projects including - AbsIL, AsmL, F#, Gyro, Pan, and TLA+. 

If you're a C# developer, and you want to get a better understanding of the C# language design process, or, more specifically you want to know why your favorite feature from your favorite language isn't included in C#, then you should definitely check out Eric's blog post where he describes the process of choosing C# language features.