ONLY US$500M?
Well, if VMWare's IPO is anything to measure with, Citrix got themselves a deal - if 9% of VMWare is worth a billion, then in a year Citrix may be able to get quite a bit for a piece of XenSource.
I'm surprised that Microsoft didn't make a bid for Xen: although it makes sense for Citrix to get a captive development house that fits their product line (like Google did with PeakStream) more so than Microsoft, which already has a virtualization product. Or (more likely) $0.5B is below the threshold that Microsoft can spend. Now that Citrix has Xen, maybe buying Citrix itself is closer to Microsoft's price range (say $2B?).
We shall see...