From the Microsoft's Unlimited Potential blog:

Microsoft internally "RTM'ed" (Released to Manufacturing) the Windows XP version we are building for the OLPC XO computer. Windows on the XO looks like it is on track for availability in these types of national educational PC deals in September. We still have no plans to make Windows available for individuals who bought an XO in the Give 1 Get 1 program though.

Courtesy of Mary Jo Foley.