Ballmer was speaking at a Power Developers event in Sydney, Australia, when someone asked the following question:
From an economical standpoint, this is a very valid question. Developing Internet Explorer surely costs the company money, money that could be spent elsewhere if the company picked one of the open source rendering engines. Apple did the same thing back when it started working on Safari. Ballmer thought this was a "cheeky" question.
"There will still be a lot of proprietary innovation in the browser itself so we may need to have a rendering service," Ballmer said, "Open source is interesting. Apple has embraced Webkit and we may look at that, but we will continue to build extensions for IE 8."
While I'm sure we won't see IE/WebKit bundled with Windows 7, it could be that Microsoft is considering an open source rendering engine for beyond IE8 and Windows 7, maybe because they're realising that the money and manpower they put into IE8 do not pay off well enough. Obviously, at this point, it's all mere speculation, but interesting nonetheless.