In some rather good news, it seems Microsoft have backed the Web Open Font Format (WOFF).
Previously Microsoft have supported Embedded OpenType (EOT), which they developed back in the 1990s, and was supported by Internet Explorer 4 onwards, although no other web browsers bothered implementing it. However back in those days adding an extra 100KB download was a heavy price to pay for embedding fonts into a website, and so it wasn't widely used. The release of the Core Web Fonts which Microsoft released for free back in 1996 were quite honestly better than a lot of fonts people were wanting to embed, or were allowed to embed, as the Core Web Fonts were designed for screen readability, and weren't just quick ports of fonts designed for printing.
However in 2009 the Web Open Font Format starting gaining support, like EOT it kept font foundries happy by preventing the font being downloaded to the computer and used in other applications, which had been the main stumbling block for all other font embedding technologies. Mozilla implemented it Firefox 3.6, Opera also have plans to implement it. The three have recently submitted it to the W3C. It isn't known if support will make it in for IE9, but it seems likely in my opinion. There's no date yet for when Opera plan on implementing it, and Chrome, Safari and the WebKit developers haven't decided who, let alone when is actually going to build support for it.
Internet Explorer and Firefox support would I think be enough to roll this thing out. As many of my readers know the second Windows Vista and Office 2007 came out I switched to using the 6 new fonts included with those on my blog and several other websites, because Segoe UI is gorgeous. Having a font embedding technology will really make the web a lot richer, maybe not for body text (frankly Segoe, Calibri, and even Verdana are hard to beat) but for headers the new choices and variety will really shine and best of all, it will cut down the need for images of text which many websites still use for headers, which don't scale well with high DPI screens and aren't easily search engine readable.
Hopefully in a couple of years web designers won't have to worry about what fonts people have on their machines, and we can just use the fonts we want to use and embed them and count on support across all, or at least most browsers.