Just as other people have pointed out, you can usually tell which is which by the scope that the item is used. You actually can't have the parameter and local variable in the same scope and if you want the private variable, just use this.myInteger. So I don't think Microsoft worried about it too much as you can easily differentiate between them if you want.
But that being said, I'm a bit surprised that no one has said this yet, but forget about Microsoft and their naming conventions (well someone might have said it by now as I had to run to a meeting and left this open without submitting it). Hungarian notation was also a naming convention started at Microsoft (or was it Xerox? I can never remember when Simonyi came up with it). I can't think of anyone that I know that doesn't curse the name of Hungarian notation to this day. We became so annoyed with it at the place that I worked that we came up with our own standard that we used internally. It made more sense to us and sped up our work a bit (it was actually pretty close to what Microsoft suggests now, but everything was pascal case with the exception of private variables).
That being said, the newer standard that Microsoft uses (the mixture of camel case and pascal case) isn't too bad. But if you and your coworkers don't like it, come up with your own set of standards (collectively is best). This of course depends on whether or not your company has a set of standards already. If they do, stick to them. Otherwise come up with what works for you and your coworkers. Just keep it logical.'
Since Aaronaught asked for citation about Charles Simonyi and Hungarian Notation:
Last two are just examples of Hungarian notation and the ootips link is just some quotes concerning some opinions on the subject. Note that there is also system Hungarian Notation but that also, as far as I'm aware, came to popularity from Microsoft programmers (although unlike Simonyi for the apps variation, I don't know whom).