Corporate giants AOL Time Warner and Microsoft are set to face off in what could prove to be the most influential power struggle the Internet has ever seen.

What once started as a mutually beneficial relationship has deteriorated into intense fear and loathing, as Microsoft prepares to directly compete with the largest online service provider in the world, former ally America Online. Microsoft's upcoming Windows XP will be the first step taken toward integrating Web services directly into the OS, a move that has AOL struggling to respond.

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ZD Internet's Mary Jo Foley is reporting on serious application compatibility issues that are being uncovered by testers of Windows 2002. Windows 2002 is the server incarnation of the upcoming Windows XP, but is not expected to ship until after the first of the year. Many of Microsoft's .NET server applications will not run on the beta OS at this point, and the company acknowledges that older versions of the software will never work. These issues are very similar to those experienced during the Windows 2000 beta, however Microsoft has learned its lesson and plans to correct the problems in future builds. Beta 3 of Windows 2002 is expected July 2, with RTM arriving January 23 of next year, according to the latest numbers received by Ziff Davis.

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After a recent virus targeted users of Microsoft's MSN Messenger Service, the company began taking steps to ensure damage was kept to a minimum. Dubbed W32/Hello.worm, the virus propogates itself upon execution much like the infamous Melissa, but over instant messenger instead of e-mail. MSN Messenger users listed on an infected system will receive a message reading "i have a file for u. its real funny," along with a file named 'HELLO.EXE'. Upon learning of the virus, Microsoft posted information on the MSN Messenger Web site under Known Issues.

"As a general issue, customers can protect themselves by following standard best practices," MSN Product Manager Sarah Lefko told BetaNews. These practices include never accepting a file or running a program whose origin you don't trust, and using a virus scanner with updated definition files.

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Microsoft has launched the "Hosted Applications Development Community," an effort to enable developers to create and share .NET applications. The site "provides in-depth technical knowledge, business information and interactive support to guide and enrich ISVs developing best-of-breed hosted applications," according to the software giant. Microsoft has also announced a free guide to help developers get started creating hosted applications. For more information and to view licensing guidelines, visit microsoft.com/asp.

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Microsoft released to testers last night the first post Beta 2 build of Windows XP. Interim Build 2465 is meant to test any regressions from Beta 2, featuring only small changes queued since before the last release. The software giant specifically asks testers to note changes in user interface, audio and print drivers, Outlook Express and Internet Explorer, networking, security, and Windows Media Player. Potential upgraders should note that Hotmail will not function from Outlook Express, and Office XP may crash while opening or saving files.

Almost obligatory these days, Build 2465 immediately leaked out onto the Web for download. Seemingly using pirates to improve the product activation process, Microsoft has been tracking the loopholes and closing them with each update. This latest interim release no longer allows disabling activiation via registry key.

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BetaNews has learned that America Online, Inc. is seriously considering ending its use of Microsoft's Internet Explorer as the Web browser in AOL software. AOL had agreed to use Internet Explorer in exchange for being pre-installed on Windows desktops.

Microsoft's Jim Cullinan informed BetaNews that the agreement to carry AOL on Windows installations in exchange for AOL making Internet Explorer the internal browser in its software ended January 1, 2001. AOL and Microsoft did discuss renewing the agreement, but nothing was formally agreed upon. Sources close to both companies blame the other for a breakdown in talks.

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Mozilla users will be happy to learn that the development group has posted an experimental new release, featuring a new auto-complete widget with IE-style dropdown menu. Auto-complete has been a very popular feature since debuting with Internet Explorer 4, one many now rely upon while browsing. The Mozilla Team asks those interested to test out the new feature and submit bug reports. The nightly build also includes an in-progress third incarnation of 'Modern', the theme that will likely come with Netscape 6.5. Those looking to try out the latest features or simply try an alternative to IE may download the release from Mozilla.org.

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Microsoft has released to manufacturing MapPoint 2002, mapping and geographic analysis software that integrates with Office. MapPoint 2002 entered beta testing last December, and included mainly Office testers. Release Candidate 0 arrived at the beginning of this month and with few bugs reported, code was deemed complete.

MapPoint 2002 features greater customization, a new ActiveX control, improved support for add-ins, territory features, and increased integration with Office XP.

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The BSDi supported FreeBSD Project has announced the availability of 4.3-RELEASE, the first since November of last year. Many security issues were corrected, as well as a myriad of bug fixes and updates made. FreeBSD is a very popular UNIX operating system based on 4.4BSD. Built around advanced networking, performance, security, and compatibility, FreeBSD is one of the best and most economical choice for any server - including the ones powering BetaNews.

FreeBSD also supports some of the latest desktop functionality, running thousands of applications available in ports. You can download the latest ISO images for free via FileForum, or read the installation guide. If you have never tried FreeBSD, the setup is a lot less complicated than it seems and you will definitely learn a lot, so create a new partition and give it a whirl. For more information, read the 4.3-RELEASE announcement and peruse the release notes.

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For users of Netscape SmartDownload, the Internet has recently become a very dangerous place.

Security experts have uncovered a flaw in Netscape's SmartDownload application that poses a serious risk even while casually browsing. A malicious image url is enough to make version 1.3 execute code on a victim's system, possibly with full administrator privileges. Netscape posted version 1.4.01 on April 3, an update which corrected the issue, but failed to issue a warning.

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Microsoft released the first beta of DirectX 8.1 to testers this evening. According to the software giant, the "beta release focuses on two key areas. The first is a complete integration into the new Windows XP Operating System. The second area of concentration focused on resolving issues found since the release of DirectX 8.0." New features in version 8.1 include support for high precision texture formats, an AppWizard for Microsoft Visual C++ v6.0, and a new nPatch quadratic interpolation order. The final release of DirectX 8.1 will ship with Windows XP, but will also be available separately for Windows 9x, Me, and 2000.

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Those looking for an early morning chuckle should take a gander at this piece regarding IBM's latest advertising campaign. Apparently, the company decided it would spray-paint sidewalks throughout San Francisco with what it calls "biodegradable chalk." The artwork was meant to celebrate IBM's newfound support of Linux, sporting the symbols for peace, love, and Tux - the penguin mascot of the open source OS. Unfortunately, the chalk did not wash away as planned and city officials are rather upset with Big Blue. IBM has stated it will cease using graffiti as a method to advertise.

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Microsoft has posted a technology preview of the company's XML parser (MSXML), which is meant to provide a look at new features, fixes, and samples in MSXML 4.0. Most notable is support of the latest W3C XML Schema, including the XSD (XML Schema Definition) language. The MSXML 4.0 Technology Preview Parser and SDK are now installed from the same Microsoft XML Parser and SDK Setup program. For more information and to download the preview, visit MSDN Online.

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The Register's John Lettice has decided to try out Windows XP Beta 2 and rely his trials and tribulations in a daily OS journal. Filled with the news site's trademark British wit, the updates also note how XP measures up to the latest Linux distributions. The latest entry discusses why Windows XP will continue to help Microsoft's desktop monopoly with a look at Luna upcoming. If you are interested in hearing more about Windows XP from a consumer point of view, visit The Register and track John's progress.

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Microsoft has posted a 120-day evaluation edition of SQL Server 2000 for Windows CE 1.1 and tools for mobile developers. SQL Server CE is a "capable database that supports reliable data synchronization based on Internet standards and that is optimized for mobile and wireless scenarios." eMbedded Visual Tools 3.0 is also available for download, a small version of Visual Studio containing eMbedded Visual Basic and eMbedded Visual C++ and the SDKs for the Pocket PC, Palm-size PC, and Handheld PC. Interested developers may download the evaluation edition of SQL Server CE and added tools at the MS SQL Server Web site.

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