From the article it looks like the "spyware" that's installed consists of: XP Service Pack 1, the latest version of MSN messenger, software that sounds analgous to JXTA and some extensions that enable the software to communicate via IPv6 (that'd be the Teredo bit).

So, while it is unfortunate that MSFT removed the ability to hide ads in the latest version of Messenger, I don't see that they're installing "all kinds of cynical spyware and corporate branding and advertising". They're just updating the machine. Horror of horrors!