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There's a detailed article in USA Today that covers the decision by Munich to choose Linux on it's 14,000 desktops.
The article points out that the Linux bit from SUSE and IBM actually cost more than the Microsoft proposal, but that the city felt that the Linux proposal still made better sense.
From the article: "On price and technical criteria the advantage was Microsoft's, but the gap was not that big," Maack says. "On strategic issues, it was clearly open-source, and the gap was very great."