The deal also calls for Microsoft to license Sony's Home Networking Module, a middleware product that supports home networking standards, in versions of Windows CE.
The two companies also agreed to support and endorse various digital TV formats that will work in PCs and in televisions, and support the fastest standard for production, transmission and reception of digital signals.
Also, both companies agreed to support the use of 1080-interlaced pixel resolution as the preferred format for high definition television. Sony also agreed to support the Advanced Television Systems Committee's transmission formats, including progressive scan, or non-interlaced, formats.
In a statement, Sony President Nobuyuki Idei, said Sony supports an open architecture that will "enable the seamless integration of PC and AV products."
Microsoft has made it known that it intends to be as influential in the consumer electronics world as it is in the PC world. The company has touted the Windows CE operating system as the perfect solution for home electronics products and automobiles.
Last week, Microsoft and eight other companies unveiled a proposal for a multimedia format for the digital TV market, the Advanced Authoring Format, that would allow producers to create content once as a collection of tightly integrated files.