After submitting my resume, I got contacted for a phone interview (I don't live in the Redmond area). The phone interview was with an HR person and lasted about 45 minutes. There wer typical behavioral questions (tell me about a time when..), and also a few marketing questions about products that I thought were marketed well, how I would improve those products. There was also a question about designing an alarm clock for the blind.
A few weeks later I received an email saying I made it through to the 2nd round. I went to the campus in Redmond as part of an interview day. There were 4 interviews scheduled for everyone participating in that day (all within the group I was applying for), each one lasting from 45 minutes to an hour with short few-minute breaks in between. All the interviewers were nice, but each interview was very different. They were all people that worked in the group that I was applying for (not HR).
My first interview was behavioral (tell me about a time when...), and asked very typical questions about why I wanted to work at Microsoft. It was very conversational, and it felt more like we were just talking about my resume, my skills, and my interests, rather than a formal interview.
The second interview was a case interview. My interviewer drew out a real Microsoft business problem on the white board and asked me questions about how I would approach the problem, what other information would I need, and what action I would recommend. After saying a few things, I got stuck, but my interviewer guided me along towards different areas to consider. In the end, there was something important that I had missed and my interviewer let me know what that was. There were also a few random questions like, describe a process to me as if I were a 7 year old child. I didn't think I did well in this interview, but it couldn't have been that bad because later I got the offer.
The third interview was very focused on marketing (I was applying for a marketing position). I was asked about products that were marketed well and poorly. I think it was crucial to use a framework in answering this question (marketing mix), but again, the interview was very conversational, and my interviewer guided me in certain directions when I ran out of things to say about a certain product. There were also questions that tested creativity like, what are all the ways you could market ping pong balls if they could no longer be used for ping pong?
My last interview was the least structured. My interviewer basically let me have the entire hour to ask any questions I had about Microsoft. The interviewers talk to each other after each interview, so maybe I had already gotten a "Yes" from the first 3? Even though I only had a few questions to start with, as we talked, it became conversational so I asked additional questions based off the ongoing conversation. I think this was to gauge my interest in Microsoft and show that I knew enough about it to ask intelligent questions.
Some people in my group got called back for a 5th interview, and we all thought that a 5th interview meant that you did well (and only 4 interviews meant you were cut), but that turned out to be untrue, since I only had 4 interviews and I got an offer. To prep for the interviews, I would just prepare for business cases, marketing cases, research the company, research your group, and show your interest in technology and in Microsoft.