It will be interesting to see where this goes.  Our banking system already allows for easy and rapid electronic transfers of funds and we already have BPay (the most popular method of paying bills in Australia by far) layered on top of that. 

In theory you could integrate BPay with a digital currency but you'd have to convince BPay that the volume of transactions would make it worth their while - a company with the reach of Microsoft or Facebook might have the pull to do that but they'd still have to find some way to make their virtual currencies compliant with our anti-money laundering and anti-terrorism laws as well as our financial services regulations.

It's still a foot in the door. Not our foot, mind you, but a big, fat, strong, corporate foot. I don't see how this would be bad for Bitcoin. If nothing else, the public perception of money as something exclusively controlled/issued by the governments would be shaken.

Well I don't know about microsoft paving the way for bitcoin, but one thing is certain. Microsoft certainly won't engage in business that they haven't already done enough research to conclude that it will go mainstream in the future. But it's not like we didn't know that the change from fiat paper money to a 100% virtual electronic currency was inevitable in the future.