Microsoft CEO Steve Ballmer, responding to a question about the support for XP off the shelf, said that customers can buy Vista, then downgrade to XP for free. "I donit know how you can do better than getting both," Mr. Ballmer said Tuesday in Washington D.C.

According to InformationWeek on Wednesday, Mr. Ballmeris comments suggest that Microsoft doesnit see the license provision as a loophole to be exploited by disgruntled customers but, in fact, is endorsing a program to spur sales of Vista.

Despite Microsoftis claim that 140 million copies of Vista have been sold, enterprise customers have had problems with Vistais onerous hardware requirements, incompatibilities with older applications and driver issues.

According to Paul McDougall with IW, this raises the question of how many copies of Vista are actually in service because of the special licensing provision. Some PC makers, including Dell, have "pre-downgraded" the PC from Vista to XP before delivering the PC to the end user.

TMO notes that other observers are lamenting the recent preview of Windows 7 at All Things Digital as an "Osborne Effect" marketing blunder. As a result, Mr. McDougall noted that some businesses may decide to wait for Windows 7 -- whenever it becomes available.

Microsoft has another reason to keep XP around. The smashing success of Ubuntu Linux on Ultra Mobile PCs (UMPCs), most notably from Asus, took Microsoft by surprise. As a result, companies are springing up right and left to sell Ubuntu Linux on Atom-powered UMPCs, and Vista cannot compete.