Yeah, this is the ultimate way for Microsoft to dominate the whole ICT market. If they get this patent, lots of software will have to be changed or the producers will have to pay Microsoft for using this custom smileys. I don't know for sure, but I think that ICQ already had custom smileys before the MSN Messenger.
Anyhow, I hope that they don't get the patent, that would be rather insane.
It's not the first time such things are tried though. Some years ago, a group of people tried to get a patent on the wheel. Although the concept of the wheel wasn't patented, they didn't get the patent. I believe this was because of some "prior act" regulation.