A YouTube user apparently got hold of HP’s Windows 7 slate, and while leaked videos like these are usually cause for geek salivation, this one was like a car wreck. I just couldn’t look away from the disaster.

If this is the real deal, it quickly illustrates why Windows 7 tablets are bad news: HP’s slate has a control-alt-delete button. Let that roll around for a minute. Because the keyboard is part of the software, and the software is prone to lock-ups, you need a button dedicated to saving the slate from doom. I can only imagine how awful the control-alt-delete button would play out in stores, which might explain why HP is targeting the Windows slate at businesses. Those chumps will settle for anything if it’s secure!

It gets worse. Shortly after firing up the device (a 30-second process), the demonstrator tries to show off Internet Explorer. “Let’s do a little bit of scrolling,” he says, dragging a finger across the browser window. Except, the window doesn’t scroll. An icon pops up, evidently used to open a new tab. Now, the demonstrator’s fumbling around. He opened the new tab by accident. Now he’s trying to close it. The computer lags behind his commands. This is hard to watch.

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IDG is reporting that sales of PC desktops and laptops are rising ahead of Windows 7′s October 22 launch date. The strong demand is unexpected, analysts said.

PC sales in July and August caught Manish Nigam, director of technology research in Asia for Credit Suisse, off guard, IDG is reporting. Credit Suisse had held the expectation that consumers would hold off purchasing new equipment until after Windows 7 ships.

Microsoft’s pre-sale marketing campaign, where it offered customers discounted upgrades for a limited time, appears to have been successful. But I question whether enthusiasm for Windows 7 PCs will be sustained after its launch, or if those early adopters were just being extremely cost-conscious.

In March, Gartner predicted a significant drop in PC sales for the year, noted the rise in popularity of low-cost netbooks, and said that PC users were extending the lifetimes of their equipment. Windows 7 will be a sales boon for Microsoft, but it might lack the potency of previous Windows releases.

People are not lining up outside of storefronts at midnight to buy Windows anymore, but that won’t stop Microsoft from creating the impression that the masses are fawning over Windows 7. The company is asking people to host house parties when the OS launches on Oct. 22. The Potemkin village has become the Potemkin house party.

Microsoft has adopted a PR technique that many large corporations and interests groups use to advance their positions in the absence of any significant public support: astroturfing. Astroturfing is a PR technique that is used to manufacture the impression of grassroots behavior. There are many examples of it being utilized to affect public policy.

Taking a handful of launch parties, and making it seem as if they are a widespread phenomenon would be astroturfing. I would not be surprised if that is what Microsoft has in mind. Many reporters will fall for it.

In what is definitely a defensive move, sources for the Wall Street Journal indicate that the company has only been asking for $15 per copy of XP intended to be installed on netbook computers. That is as little as 25% of its typical fee for notebooks and desktops.

With Linux a popular choice for those looking to avoid Microsoft’s high royalty fees, Redmond apparently felt the window of opportunity closing. Thus it has begun an agressive push to remain dominant in this space as well, and it meant taking a hit on profit margins for its Windows software.

Netbooks may have conribute to the 8 percent decline in revenues in the division, although to be fair that may include customers deciding to pass over Vista and deciding to wait it out for Windows 7.

Speaking of Win 7, how will that handle netbooks? Microsoft is considering a policy of only allowing three concurrent applications. While it may seem unreasonable for them to do so, consider the fact that these devices for the most part do not contain top-of-the-line hardware.

I’ve confirmed a report by Bloomberg news report that Microsoft plans to ship Windows 7 by October. Microsoft has also worked out a contingency plan for a secondary launch date in the event that the European Commission takes action, a well-placed source at Microsoft told me.

Ray Chen, president at Taipei-based Compal Electronics, made the disclosure at an investors’ conference at the company’s headquarters today. He also projected that Windows 7′s release could help reinvigorate sagging PCs sales amid the global economic downturn. Chen is positioned to know: Compal produces laptops for big-name brands including Acer and Hewlett-Packard.

A source at Microsoft told me that Chen is right on the money. The October timetable also meshes with the unofficial word that I have been hearing for weeks. Should the EU take action, Microsoft will push the release back to January, mirroring Windows Vista. OEMs have been asked to move forward as if October is the date regardless of what happens in the courts.

Indeed, Microsoft appears to be on track with its new operating system, and is nearly ready to begin updating its beta release to solicit more feedback from testers.

Windows 7 builds on the plumbing that was laid by Windows Vista. Application and hardware compatibility issues should not involve anywhere near the hassles that the XP-to-Vistra transition caused, because Windows 7 is not a dramatic departure from Vista. Additionally, Microsoft had already completed work for application developers in October before it even issued the first beta.

Windows Vista also got off to a rocky start in part because it was released in January–about the worst possible time for a new OS to debut. But the European Union willing, and unless there’a some sort of unanticipated problem, expect Windows 7 to be on store shelves and preinstalled on new PCs for the holidays.

At an analyst meeting in New York City today, Microsoft CEO Steve Ballmer revealed that the company was working on a low-end edition of Windows 7 that’s designed to run on netbooks. The increasingly popular budget notebooks rarely run Windows Vista, in part because that OS’s hardware requirements–formulated in the pre-netbook era–simply exceed what most 0f the low-cost machines have to offer.

Microsoft’s interest in netbooks is an acknowledgment that Windows 7 needs to compete with lower-cost solutions that come preloaded with Linux and even Windows XP. Other potential entrants, including Google’s Android OS, are also threatening Windows’ dominance.

The company’s failure to compete in the low-end market has profoundly impacted its finances. Windows client revenue recently fell 8% as a result of PC “market weakness and a continued shift to lower priced netbooks,” according to Microsoft’s second-quarter earnings release. Even so, Ballmer stated that about 90 percent of netbooks have been shipped with Windows XP, during today’s conference.

And that trend is significant: netbook sales are steadily increasing. This month IDC found that netbooks account for 30% of sales in the Europe, Middle East and Africa (EMEA) market alone.

Outlining Microsoft’s strategy to appeal to netbook buyers, Ballmer said that Microsoft is developing a low-end version of Windows 7 designed specifically for netbooks, and will provide an upgrade path to more powerful versions of the OS. Windows 7 is designed to work well on inexpensive laptops, he said.

Ballmer didn’t talk about what features the Windows designed for netbooks will and won’t offer, but the company has already announced that the bargain-basement Windows 7 Starter Edition will only let users run three programs at once. My take is that Microsoft would be wise not to appreciably limit the functionality of Windows 7 on netbooks, or customers will vote with their feet, and PC manufacturers will choose another operating system that makes the most of what netbooks have to offer.

Yesterday I wrote about the Windows 7 dust-up that involved a couple of security bloggers’ concern that malware could silently turn User Account Control off, and Microsoft’s seeming unwillingness to talk much about the issue other than to say it wasn’t really a problem. Today, Microsoft’s Jon DeVaan addressed the controversy on the Engineering Windows 7 blog. The gist of his 2100-word post: Microsoft appreciated the input, but UAC’s behavior wasn’t an issue, because malware could only fiddle with UAC settings after it had gotten on a PC, and Windows 7 is really good at warding off malware. And to change UAC’s default behavior to alert users when UAC settings changed would be inconsistent with the approach which Microsoft’s testing had shown that real people liked.

I make no claim to being a security expert (or even the intended audience for DeVaan’s post, which was aimed at developers). But like the rest of Microsoft’s response to this mini-firestorm to date, it was profoundly unsatisfying. No matter how strong Windows 7′s anti-malware protections are, some bad stuff is going to get on some PCs. Why not make it tough for it to perform one task which would unlock the ability for it to do further damage? Screwy but possibly appropriate metaphor: It’s like an apartment manager telling tenants that a presence of a burly doorman in the lobby meant that anyone found in the building changing the lock on a particular conso must be doing so with the owner’s permission.

That post went up at midnight. At 3pm, another one appeared–cosigned by DeVaan and Windows 7 honcho Steve Sinofsky. With reasonably good humor, it ate crow and said that Microsoft will change Windows 7′s behavior:

With this feedback and a lot more we are going to deliver two changes to the Release Candidate that we’ll all see. First, the UAC control panel will run in a high integrity process, which requires elevation. That was already in the works before this discussion and doing this prevents all the mechanics around SendKeys and the like from working. Second, changing the level of the UAC will also prompt for confirmation.

It’s startling that it took Microsoft so many false starts before they got this right: Even if Microsoft was right on some theoretical, technical level, the issue had snowballed into an argument the company simply couldn’t win, period. Nerds will be nerds, and nerds are often stubbon, prickly, and prone to falling victim to the hobgoblin of little minds. But good for Microsoft for (eventually) engaging in healthy, bloggy debate, and being willing to concede its mistakes and move on. Knowing when you’ve screwed up and being unafraid to admit it in public is very 2009.

More at Dwight Silverman’s TechBlog, Mary-Jo Foley’s All About Microsoft, and I Started Something by Long Zheng (one of the guys who raised the issue in the first place).

Well, I guess we can consider this a half win. While Microsoft will still offer just about the same number of SKUs as it did for Vista – criticized because it confused consumers – it will only focus on two of them. Pricing has yet to be announced, however.

Mary Jo Foley over at ZDNet has the details straight from Windows business chief Bill Veghte. There will be three main consumer-focused versions of the OS which will work as follows:

• Windows 7 Home Premium
• Windows 7 Professional
• Windows 7 Ultimate

Two SKUs would be available to the so-called ‘developing markets:’

• Windows 7 Starter Edition
• Windows 7 Home Basic

There would also be a version aimed at business, Windows 7 Enterprise. This does not include the EU-mandated N and K versions, which add additional SKUs to the lineup. In any case, you will be able to purchase upgrade media even if you have XP installed. Very smart move on Microsoft’s part.

I’m definitely a Mac. Saying that now is kind of weird, considering just three short years ago other than a brief stint in college the last time I used an Apple computer was in Elementary School. Apple’s ease of use sucked me in, and although yes there is a learning curve, once you get going  things just work smoother.

No doubt Apple is resurgent at this point. Microsoft needed to do something to stop the bleeding before it would take some permanent damage. As I argued back in December, Windows stood to benefit from some Mac-like functionality, even though some Microsoft pundits seemed to disagree.

Now actually having the OS in front of me, I can honestly say for the first time in a long time I am impressed with Microsoft. Windows 7 actually is pretty slick. Instead of consisting merely of window dressing, this time it actually appears as if it may be worth it to upgrade.

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[NOTE: 2/2/09 - This is an updated version of the original post from Sunday.]

I am writing this for those of you who may be daring enough to attempt an install of Windows 7 on your Macs. Yes, it may be blasphemy, but even us Macheads are a little curious sometimes, right?

Anyway (to me) the install was quite painless. What you want to do is open up your Applications, then select Utilities. Open up Boot Camp Assistant and Follow the instructions. Even though it asks for a XP or Vista disk, the Windows 7 disc will work.

Just make sure you select the partition labeled BOOTCAMP! Any other one could wipe your Mac OS clean.

The install went without a hitch, but I ran into serious problems in getting any drivers installed. All the instructions I’ve seen (here and here) seem to suggest the Boot Camp installer on the Leopard disk works fine.

Not for me, I got this:

That doesn’t seem to be happening with other folks, however. The instructions don’t provide for this. I’m wondering whether or not the version of my disk (10.5.1) may have something to do with it: the Boot Camp Installer is different as its an earlier version.

There is a way to fix this however if Boot Camp is failing. It involves taking the following steps:

1) Create a folder on the hard drive. For the sake of convenience, I placed it on my desktop for easy access. Name it “BootCamp” or whatever you’d like.
2) Open up the CD’s contents. For you Mac folks, this process in Windows 7 is Computer > right click on DVD drive > Open.
3) Copy the entire contents to that folder you have just created.
4) Download this file: Bootcamp.msi.
5) Place that downloaded file in the Apple directory of the copied version of the DVD, it should overwrite the previous one.
6) Run the setup.exe file. Boot Camp should install properly.

In some cases, there has been reports that this has not worked. Let us know if it doesn’t for you. But it should for most.

So far all features appear to work normally, including sound. I have also noticed the residual benefit of a much quicker load time coming into Windows.

It wouldn’t be a Microsoft product without it! Users of Windows 7 Beta who may have not downloaded a patch for an MP3 corruption issue that was available shortly after the products public release are now getting it via Automatic Update. The issue would permanently alter an MP3 file played through Windows 7: the first few seconds of the audio would disappear. However, this would only occur if a user edited the MP3 files metadata, so it didn’t affect a lot of users. Nonetheless, the patch is out (see this Knowledge base article), so the problem should be fixed. Other problems are addressed in this patch, mainly dealing with multimedia issues.

Stretch your legs, go outside, and get fresh air–the Windows 7 beta is delayed until tomorrow. Windows team blogger Brandon LeBlanc has announced that Windows 7 is such a hot commodity that the company has to shore up its server infrastructure to meet the demand.

Developers who have MSDN or TechNet subscriptions can download Windows 7 Beta today; it will (in theory) become generally available tomorrow at 12 PM PT. Direct download links are live if you want to get the jump on all the people that will spend their Saturdays downloading a beta operating system, but installations without product keys are limited to 30-day trial periods.

As an aside, has anybody told Microsoft about BitTorrent yet? It seems to be a reliable way to distribute big files to lots of people.

If you want to upgrade to the Windows 7 beta from Windows XP, you are out of luck–it doesn’ offer an upgrade path. Upgrade installations are only supported for PCs that are running Windows Vista with Service Pack 1. The company has not yet announcing finalized upgrade paths for Windows 7, a spokesperson wrote in an e-mail. The beta is available in one edition that is roughly equivalent to Windows Vista Ultimate Edition.

It behooves Microsoft to provide an upgrade path from Windows XP Professional. Only about 10 percent of enterprises have deployed Windows Vista as their major OS, Information Technology Intelligence Corp’s principal analyst (and owner) Laura DiDio said yesterday. Windows 7 can’t arrive soon enough.

Steve Ballmer has made it official: the public beta of Windows 7 has begun. On Friday, the beta will be available worldwide at the Windows 7 web site, and at his keynote at CES Wednesday night he urged everybody to download it. TechNet, MSDN, and TechBeta customers will get access starting tonight. So if you’re lucky enough to have access to those, run — don’t walk — to Microsoft’s website before their servers crash under whats probably going to be a tidal wave of curious techies…

According to TechARP.com, Microsoft has gone ahead and begun to offer details of its upgrade program for those who buy Vista machines before Windows 7 releases late this year to its partners. In some cases customers may be eligible for a free upgrade.

Those who purchase a Vista machine between July 1 and a yet to be determined date would be eligible for a free upgrade to Windows 7. Users of Vista Home Premium, Business, and Ultimate would be eligible for the program.

This particular program is aimed at individual consumers — multi-license purchasers would not qualify under this program. Microsoft said those customers should use the “appropriate” volume licensing program for their upgrade path (there’s no mention of a free/discounted upgrade offer for those folks as of yet).

Upgrade paths would go as follows:

• Vista Home Premium -> Windows 7 Home Premium
• Vista Business -> Windows 7 Professional
• Vista Ultimate -> Windows 7 Ultimate

Microsoft’s OEM partners would be shipped copies of the OS, and it would be their responsibility to ship them to the customer. However, customers would have to wait until Win 7 officially releases, obviously.

So how much can we trust Tech ARP? These folks do have a good track record: they have been able to nail down RTM dates in the past, including the release of Vista SP1. We shall see if they are right again.

With Windows 7 set to make its public debut Wednesday at CES (it already has, if you count the BitTorrent leak), in honor of the seventh major version of Microsoft’s operating system, I’ve come up with seven things I think Windows 7 must do.

Redmond is at a crossroads. Apple is resurgent–the iPod and now the iPhone Effect are driving users away from Windows. Vista isn’t helping much either: the negative feedback loop caused by Microsoft’s bungled launch and marketing is also contributing to the exodus.

Windows 7 could be considered a critical release for Ballmer and Co. Either the new operating system plugs the hole in the dam, or the cracks grow bigger and wider. Microsoft needs Windows 7 to be a success more than I think it currently realizes. The threat from Apple is real.

So what does Windows 7 need to do?

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If you cannot wait for Windows 7 to make its public debut sometime next month, you can get on BitTorrent now and download it. The next generation operating system has appeared on the P2P service as an ISO file.

The build number is 7000, which is believed to be the one which will get the “Beta 1″ label. It is a copy of Windows 7 Ultimate, according to sources. About 1,500 seeders are available for the file and it is approxmately 2.5GB in size.

Windows 7 Beta 1′s leak onto BitTorrent follows a similar incident where an Alpha of the OS that was debuted at PDC also ended up being available on the service.

Reviews seem to indicate that overall the beta seems quite stable, probably indicating that we will only see one public beta of this OS before it rolls into the Release Candidate stage.

All in all, it appears as if Microsot is ready to push 7 out the door as fast as they can…