Microsoft has a large number of pure researchers working for it.  They are collectively known as Microsoft Research (MSR).  Once a year a large contingent of these researchers gather in Redmond for an event called TechFest.  All full time employees are invited over to attend lectures and wander the "show floor" where various teams have set up booths.  The researchers are available to talk to and are more than happy to describe what it is they are working on.  There are people working on 3D graphics, podcasting, video, image detection, automated error detection in code, operating system concepts, etc.  You can see some videos of the items available here.

TechFest is interesting.  I think it is Microsoft's attempt to avoid being Xerox PARC.  For those unfamiliar with PARC, it was the Palo Alto Research Center that Xerox set up in the 1970s to explore the future of computing.  Amazing things happened there.  Among the inventions were the personal computer (Alto), Ethernet, the laser printer, the bitmapped display, and the modern WIMP GUI.  With all this cool stuff being invented, why isn't Xerox's name associated with computers today?  They were a photocopying company and didn't have an interest in actually developing any of their inventions.  Techfest is an opportunity for people in the product teams to meet the people in the research teams and hopefully cross-pollinate.  Many items from research have made their way into our products via just this method.