Licensing question about the BSD

[Steve]

	I've been doing some reading about the BSD license, and GPL-proponents' 
criticisms of the old "advertising clause" as it existed prior to 1999. 
 A chief problem that GNU had with it was that the requirement to 
acknowledge original copyright owners in derived works leads to bloated 
and unwieldy acknowledgment lists as code evolves and becomes included 
in generations of derived works.

	However, as I'm reading the BSD license text on www.opensource.org, I'm 
not seeing how that issue was resolved simply by removing the 
"advertising clause".  The first two clauses of the current  BSD license 
still seem to require a form of acknowledgment:

"Redistributions of source code [or clause 2: "in binary form"] must 
retain the above copyright notice, this list of conditions and the 
following disclaimer..."

	Does this not mean that an incrementally-growing list of contributors 
must be acknowledged through retention of their copyright notices in 
derived works?  For that matter, doesn't this verbiage imply that works 
deriving from BSD-licensed code must be licensed under the BSD as 
well... since the "copyright notice, list of conditions, and disclaimer" 
(basically the entire contents of the license) must be retained in 
"redistributions of source and binary forms, WITH AND WITHOUT 
MODIFICATION" (i.e. derived works)?

	Since BSD-licensed code has shown up in proprietary-licensed Microsoft 
products, and since I haven't seen any mile-long lists of 
acknowledgements in BSD-licensed projects' README files lately, I think 
it's safe to say that my interpretation of the BSD license text is 
flawed.  What am I missing, then?