Sometimes, a government or one of its agencies may need to monitor communications between telephone users. To do this with POTS [Plain Old Telephone Service], after obtaining the appropriate legal permission, a recording device may be placed at a central office associated with a selected telephone number. Electrical signals corresponding to sound to and from the telephones at the selected telephone number may be monitored and transformed into sound. This sound may then be recorded by the recording device without the telephone users being aware of the recording. With new Voice over Internet Protocol (VoIP) and other communication technology, the POTS model for recording communications does not work.
Seattle Weekly contacted Microsoft for clarification on when the spying technology could be used and if it would ever be used solely by Microsoft or Skype employees without a law-enforcement request.
We'll update when they return an answer.
UPDATE: Microsoft's answer is no answer. They are refusing to comment on the technology or how they plan to use it.
Obviously law enforcement's ability to monitor people's communications is practically limitless in the post-PATRIOT-Act world. So any beef people have with government agents listening in on them should be directed toward their nearest lawmaker.
It's just not every day that one sees a private company looking to grease the wheels of spook-snooping with its own patented technology.