The issue around ODF is to have a non-proprietary open file format that any software ...be it open source or proprietary can use.
If every software vendor is using the same file format, and has complete access to the code used to create the format then it doesn't matter what programme you use to create a document. You can open and read a document using any office suite.
It's true that Open Office, Star Office, Abiword, Corel Wordperfect etc. can all read and create M$ formatted documents, they can't do it 100%...its maybe 90% or 85% or whatever. Its not quite perfect and there are little glitches here and there. That's because they're reverse engineering the formats...an incredibly difficult job.
A government shouldn't be favouring one vendor over another. With M$ formats, that's what you're doing.
The second issue is that a government wants to be able to open electronic documents not just today or tomorrow, but 50 years from now. And with proprietary document formats constantly changing you don't want to be a) stuck with electronic documents that you can't open and b) be dependent on a particular software vendor.
M$ was asked to be part of the original group that created the ODF standard, but pulled out and is refusing to support it in future versions of M$ Office. They allege that they "can't" support it for technical reasons. But saying that the world's largest software company "can't" support a file format is such obvious B.S.
M$ wants its Office 12 XML formats considered "open" but its a format that hasn't even been created yet.
ODF is supported in Open Office 2.0 and I understand will be supported in upcoming versions of Corel Wordperfect, Star Office etc.