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Let preface this by saying that I understand that any advice I may receive is not to be taken as 100% correct, I am just looking for what people's understand of what this license is.

I have been looking for a library that allow be to deal with archived compressed files (like zip files) and so far the best one I have found is DotNetZip. The only concern I have is that I am not familiar with the Microsoft Public License. While I plan to release a portion of my project (a web application platform) freely (MIT/BSD style) there are a few things. One is that I don't plan on actually releasing the source code, just the compiled project. Another thing is that I don't plan on releasing everything freely, only a subset of the application. Those are reason why I stay away form (L)GPL code. Is this something allowed while using 3rd party libraries that are licensed under the Microsoft Public License?

EDIT
The part about the Microsoft license that concerns me is Section 3 (D) which says (full license here):

If you distribute any portion of the software in source code form, you may do so only under this license by including a complete copy of this license with your distribution. If you distribute any portion of the software in compiled or object code form, you may only do so under a license that complies with this license.

I don't know what is meant by 'software'. My assumption would be that 'software' only refers to the library included under the license (being DotNetZip) and that is doesn't extends over to my code which includes the DotNetZip library. If that is the case then everything is fine as I have no issues keeping the license for DotNetZip when release this project in compiled form while having my code under its own license. If 'software' also include my code that include the DotNetZip library then that would be an issue (as it would basically act like GPL with the copyleft sense).

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I don't know what is meant by 'software'. My assumption would be that 'software' only refers to the library included under the license (being DotNetZip) and that is doesn't extends over to my code which includes the DotNetZip library.

That's correct. The term "Software" used in the license refers to the software that license is about: DotNetZip.

If you distribute any portion of DotNetZip, you must retain all copyright, patent, trademark, and attribution notices that are present in the software (3c).

If that is the case then everything is fine as I have no issues keeping the license for DotNetZip when release this project in compiled form while having my code under its own license. If 'software' also include my code that include the DotNetZip library then that would be an issue (as it would basically act like GPL with the copyleft sense).

The latter is not the case, MS-PL is not a reciprocal license. It only requires that the software you distribute if it contains MS-PL'ed parts, must comply with the license requirements for the MS-PL'ed parts. As long as you don't give any sources from DotNetZip you do not even need to provide a copy of the license text if I read the license correctly.

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