It uses a virtual machine and a class library Common Language Runtime. (see Microsoft site [1] (http://www.microsoft.com/partner/products/microsoftnet/CLRTechPage.asp)). There are many compilers being developed which produce code for this virtual machine. The code it executes is called Common Intermediate Language (CIL) or Microsoft Intermediate Language (MSIL).
It seems that in the future there will be at least two major virtual machine technologies competing (see Java virtual machine)
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