This is good for the longterm

This move is a good thing.  It means many things.  First I'd say we are officially in the
'then they fight you' phase in yet another market segment, low spec laptops.

I suspect OEMs are split on this, many were terrified of what was shaping up as a race to the
bottom and hope Microsoft has saved them from the pressures of the marketplace.  On the other
hand some won't like the heavy handedness of this move, the obviously artifical line between
cheep machines that qualify and others that don't, etc.  And besides, OEMs like Asus don't
have a choice but to play ball with Microsoft because while the EEE PC is selling well with or
without Windows, annoying Microsoft would risk their higher dollar product lines.

Watch customers for the interesting reaction.  What do you think Fortune 500 corps are going
to think when a) they are told XP is dead, kaput, unavailable, etc. yet Microsoft is selling
the very product many of them WANT at prices lower than the sweatheart deals they can get when
buying by the 10K units and sometimes after waving the Penguin flag themselves in attempts to
get better prices.

Longterm this move won't stop the bleeding.  Moore's Law is going to drive prices down because
for a large segment of the market a 1Ghz class machine is enough so faster isn't really
valuable to those customers.

I'll just repeat a prediction I have made before.  Eventually the prices on hardware will drop
low enough that one of two things happen.

1.  Microsoft lowers license pricing far enough it guts their profitability in order to
maintain an OS monopoly that won't be able to keep enough cash rolling in to make shareholders
happy.

Remember that Windows and Office generate almost all profits, which is how they can lose money
on things like their Internet and game divisions.  Office will be under increasing pressure
from OO.o as the years roll on so jacking it's price to compensate isn't an option.

Keeping XP around is only a stopgap.  When they are selling the same OS at vastly different
prices those paying the premium prices will start to balk.

2.  Microsoft conceeds the bottom to Linux.  Of course this will be fatal because what is low
end today will be average tomorrow.  The computing world is littered with the husks of
companies who made this mistake.  Don't expect Microsoft to be this dumb.

But even worse will be when a Chineese consumer electronics maker gets the bright idea to
churn out a cheep generic linux desktop or laptop and sell it in places that don't have a
horse in the PC game and thus won't care if it canabilizes sales of higher price/margin
machines.  Not being in the PC business they won't have other product lines to worry about
retaliation on.  Game over.