The answer to this is an emphatic "yes," as Sam Ramji relates in a recent interview. It's not a question of "can" but rather one of "will." Does Microsoft have the will to embrace open source?
There are many answers to that question, as many employees as there are employed at Microsoft.
Sam, Bill Hilf, and others within Microsoft are clearly sincere in their embrace of open source. They don't, however, make any pretense that open source is the Absolute Answer for Microsoft. But they clearly see much that the company can learn from open source.
Steve Ballmer? I don't think he sees much opportunity in open source. He's killing his numbers and has been doing this for several decades. You can't teach an old (and successful) dog new tricks.
The real question is where the vast majority of the company will settle on the question of open source. The jury is still out on this one but as the old guard at Microsoft is replaced with new blood I believe we'll see a gradual opening up within Microsoft. Just don't expect it to happen tomorrow.