A service originally designed to compel unpaid Vista users to obtain genuine licenses is apparently being scrapped in Service Pack 1, to be replaced with a more "in-your-face" approach.

In a prepared Q&A released by Microsoft this morning, corporate vice president for Windows product marketing Mike Sievert divulged that Reduced Functionality Mode (RFM) -- a service that disables certain features of Windows Vista until the user activates the system, assuming she can -- will be scrapped in Service Pack 1. In its place will be something that reduces the user's experience instead.

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A heavily promoted performance test by an evaluation software firm appeared to situate Windows Vista SP1 performance against Windows XP SP3. But the initial workloads were actually different due to the Office software used, testers admitted to BetaNews today.

Devil Mountain Software's test results comparing similar workloads on systems with varying editions of XP and Vista -- including the latest service packs or their equivalents -- show the Vista system performing astonishingly more poorly, by a staggering 144%.

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Vista's Software Assurance customers need more value from Vista more often, and now the company has a plan for addressing their needs come next spring.

A growing number of Microsoft's business customers for Windows Vista are subscribers - customers who've signed onto the company's Software Assurance program. As such, they want their money's worth, which means Microsoft finds itself in the position of having to deploy noticeable improvements to the operating system at least every eight to ten months...as opposed to every five years.

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Microsoft has released yet another build of its first planned service pack for Windows Vista on Wednesday, opening up the patch to a broader base of testers. While the first public beta of SP1 was shipped to 12,000 testers, this latest build opened up the test to 3,000 additional people. Smaller groups have been receiving private builds since the spring of this year.

The targeted release date still seems to remain as the first quarter of 2008, although the Redmond company is so far staying silent on any word when wider public betas will be available. Details on exactly what will be included are somewhat scarce, although Microsoft is promising to include all fixes issued since the release of Vista last fall plus several new features.

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Microsoft isn't waiting for Vista Service Pack 1 to push some important operating system updates to users.

Several updates will make their way to users this week through Windows Update, Windows Vista team member Nick White wrote to the official Vista blog on Monday. If users decide to pass on the updates, they will be included in SP1.

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It was indeed an astounding quarter for Microsoft, with operating income having grown last quarter at an annual rate of 32%. A big part of that growth is attributable to Windows Vista. But does the fact that customers are adopting it truly signal that customers are embracing it? Yesterday, the company's chief financial executives offered some very revealing data.

What recession? Since Chris Liddell's arrival as Microsoft's Chief Financial Officer, the company's timing and execution have been impeccable. He has five business divisions whose books he manages, but the weight of capital expenditures in the revenue of at least two divisions have been more than offset by gains in the other three that help Microsoft to cruise right along.

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Although Windows Vista has been on sale for nearly nine months, Microsoft has yet to seriously market the operating system, letting a certain rival control public mind share on a number of fronts. That's all about to change, as the Redmond company attempts to make Vista more compelling to consumers.

At an event in New York City this week timed to coincide with Apple's launch of Leopard, Microsoft executives invited members of the consumer press from all over the world to see why they should pay attention to -- and write about -- Vista this holiday season.

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The principal reason given for the tremendous under-the-hood changes to Windows unveiled early this year in Vista was the need to overhaul the security model. Indeed, Vista has proven to be a generally more secure operating system, though some vulnerabilities that apply to ordinary software impact Vista users just as much as any other.

But now, software analysts testing the latest build 3205 of the beta for Windows XP Service Pack 3 are discovering a wealth of genuinely new features - not just patches and security updates (although there are literally over a thousand of those), but services that could substantially improve system security without overhauling the kernel like in Vista.

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Stardock has released version 6 of its popular WindowBlinds user interface skinning application, which is the first tool that can overhaul the look of Windows Vista - from the Taskbar to window borders and buttons.

Although Microsoft improved upon the "Luna" skin it created for Windows XP back in 2001, the Redmond company still does not enable users to change the interface graphics of its operating systems, Vista included. This is a positive for Stardock, which has been helping users "skin" Windows for nearly a decade.

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Multiple Microsoft sources have confirmed that the first beta test editions of Service Pack 1 for Windows Vista were distributed to a select group of about 12,000 testers today. BetaNews learned these are indeed exclusive invitees, not merely a subset of the company's MSDN or TechNet subscriber base.

An account of the SP1 experience published today by Microsoft team blogger Brandon LeBlanc confirms what BetaNews reported three weeks ago: Rather than add new features, SP1 concentrates on making the existing ones work better - at least, those which remain after a slight feature cut.

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In a Knowledgebase advisory to developers today, Microsoft is urging developers for Windows Vista who intend for their programs to run under Service Pack 1 not to assume the default search protocol being used by the system is Microsoft's. This after over a year in which Microsoft spokespersons have maintained, under a rain of criticism from search competitor Google, that Vista's and Internet Explorer 7's search facilities were already manufacturer-agnostic.

"If you develop an application that is meant to use or meant to build upon a specific desktop search application, you should not depend only on the search protocol," reads KB941946, released today. "Because many applications may own the search protocol, you cannot guarantee that the targeted desktop search application owns the search protocol at any time. Instead, use a private search protocol that is defined by the targeted desktop search application."

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As part of a request to help modify its apparent stance on the upcoming removal of Group Policy Management Console from Microsoft's Windows Vista Service Pack 1, a company spokesperson told BetaNews, "The removal of the GPMC tool with Service Pack 1 is not significant to the majority of Windows Vista users."

This despite the continued presence of remnants of the GPMC campaign, which touted its inclusion in Vista as a boon. "The Group Policy Management Console, or GPMC, was available as a download for Windows XP and Windows Server 2003," reads one TechNet page.

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A curious problem cropped up last month: Windows Vista users reported that the program that manages their Windows services (SVCHOST) would crash after having downloaded and installed a batch of updates.

Microsoft recently issued a manual fix for this problem, though users who don't want to have to learn the equivalent of heart surgery should soon be able to download a patch for the Background Intelligent Transfer Service (BITS)...assuming it works.

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Following their public availability on Microsoft's Download Center, two hotfix packs for Windows Vista that improve performance and reliability are now available as optional downloads via Windows Update. They will not, however, be delivered automatically to Vista users.

Some of the changes offered by the updates include better file copy performance, faster boot times, improved compatibility with newer graphics cards, and better performance in games with advanced visuals. Those who do not want to install the fix packs manually can wait for Vista SP1, which is slated for public release early next year.

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Now that Microsoft has set a release date for both the beta and final versions of Windows Vista Service Pack 1, the company is also offering a detailed look at what's being fixed and changed. One thing customers will not see is major changes to User Account Control, although Microsoft says it will reduce some pop-ups.

Perhaps the most notable change will not be for customers, but rather Microsoft partners. The company is including an API that third-party developers can tap into in order to work with kernel patch protection on x64 editions of Vista. This patch protection has proven to be a problem to antivirus and other security vendors.

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