HTML5 and Microsoft is a contentious combination, not least because of HTML5's effect on existing web development tools such as Silverlight and the small matter that Microsoft and open standards have never gone down well. However there are rumours that Microsoft is starting to consider how to better support application development in pure HTML5. Microsoft watcher Mary Jo Foley lists a collection of comments and blog posts in support of this viewpoint. Basically the idea is that new browser-based tools and, more importantly for Microsoft developers, Visual Studio tools are on the way.
The soon to be released VS 2010 SP1 is supposed to include intellisense and general HTML5 support in the editor and some CSS3 support - but this is only for some elements - the support isn't complete. Mary Jo reports tips that Microsoft might be getting ready to announce something more concrete at Mix'11 (April) and the rumours speak of standalone and integrated VS tools.
What is as interesting is that the speculation has started a discussion of what is needed to work with HTML5. Some are of the opinion that all you need is a text editor and a browser to create sophisticated web apps and think Microsoft should leave well alone. Basically this view comes down to - who needs Visual Studio bloat when Notepad is enough. The other extreem end of the argument wants to wrap the HTML5 technologies in drag-and-drop editors and intelligent code editors and generators.
Of course in the case of pure HTML5 the big problem that Microsoft has is what to do about the server side. HTML5 and the canvas tag in particular make it possible to create web apps that look like desktop apps but this only deals with the client side of the equation. Until Microsoft decides how to backup the client side with an easy-to-use and Microsoft-sourced server technology it doesn't have a complete solution and any tools it creates are just WISYWIG editors.