Developer Division @ Microsoft is responsible for Visual Studio and it's the division I belong to.  Following two Channel 9 videos will give you some peek at the development processes used by the division.  These processes are new to the division.  Trying to be more agile / scrum, I guess.  I will let you decide whether we are on the right track in terms of being truly Agile.

Shoshanna Budzianowski explains how the division is trying to be more agile
Shoshanna (ShoShe) is the Director of Program Management @ Developer Division.  This video is not really about the development process but she does talk about it.  You can listen to the whole thing if you want but most of development process discussion happens during first 10~12 min.  By the way, she was my 7th and last interviewer.  I had a great discussion about Agile Development, some challenges people face, things that people mis-understand, etc.  It was the toughest one though. 

The Quality Milestone
Developer Division just came out of what we call The Quality Milestone.  The idea is about taking some time after shipping a major product to get ready for the next one.  Some of the big initiatives include getting rid of all bug-debts from the current release (Visual Studio 2005), creating the next generation test automation framework, increasing test automation coverage, setting up continuous integration environment, beefing up the build infrastructure and reviewing the development process and optimizing.  It’s all about ensuring that we are delivering the quality software.