In a huge blow to the potential success of Windows XP Media Center Edition, Matsushita and Sony have announced an unprecedented collaboration that will result in an open-source (GPL’d) version of Linux especially for consumer digital media devices.

A Matsushita representative told the Financial Times, “We are not forming an alliance to compete against Microsoft”. Maybe not specifically, but Matsushita and Sony are in talks to set up an industry forum with the heaviest of hitters in the consumer electronics industry, including Hitachi, IBM, NEC, Philips, Samsung and Sharp. | Associated Press | Dow Jones | Financial Times | News.com | PC World | Sony (press release)