Microsoft yesterday released a new hotfix, KB941649, which improves the compatibility, reliability, and stability of Windows Vista. This update includes the following improvements:

• It extends the battery life for mobile devices.
• It improves the stability of portable computers and of desktop computers that use an uninterruptable power supply (UPS).
• It improves the reliability of Windows Vista when you open the menu of a startup application.
• It improves the stability of Internet Explorer when you open a Web page.
• It improves the stability of wireless network services.
• It shortens the startup time of Windows Vista by using a better timing structure.
• It shortens the recovery time after Windows Vista experiences a period of inactivity.
• It shortens the recovery time when you try to exit the Photos screen saver.
• It improves the stability of Windows PowerShell.

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Toshiba and Microsoft today announced plans to form the Advanced Interactivity Consortium (AIC), an open forum aimed at the promotion of superior interactivity for a wide range of next-generation consumer devices, digital content and distribution scenarios. The newly formed organization's mission is to maximize consumer satisfaction worldwide by accelerating industrywide adoption of advanced interactivity and interoperability across a broad array of HD DVD products.

It looks like Microsoft is planning to ditch the current core version of the Xbox 360 for a new model known as the Xbox 360 Arcade. It will share the same $279.99 price tag as its predecessor and will be sold with a 256MB memory card, which should allow users to save games without needing to spend at least $29.99 on a 64MB memory card. It was listed earlier on Amazon.com and the Toys "R" Us website, although it has since been removed from both, and rumours of other changes from the current core model include the possibility of five free Xbox Live Arcade games and perhaps a wireless controller as standard. The updated version of the console is scheduled to become available from 23rd October, with the Elite and Premium models expected to receive game bundles in order to make the Xbox 360 more attractive to consumers.

Underscoring the company's vision for helping to advance the digital entertainment industry and deliver great music experiences to its customers, Microsoft Corp. Chairman Bill Gates and Corporate Vice President J Allard yesterday unveiled the next generation of Zune portable media players, software and online store. Gates and Allard also introduced Zune Social, a beta online community Web site.

Microsoft has distanced itself from rumours that it will be splitting with Halo developer Bungie, claiming it never said anything of the sort.

There's been no such announcement,

We continue to celebrate the tremendous success of the global phenomenon that is Halo 3.

a spokesperson told Eurogamer.net. The claim first came from a blog spreading the news all over the net. Click here to read our version of the story posted earlier today.

According to someone who works in Bungie, as of yesterday, Bungie is no longer working for or with Microsoft. Their proof of this lies within Bungie's global address book. If you ask any employee of Bungie to find any Microsoft contacts in that address book, you will find nothing. If this is true, Microsoft will post the press release on October 6th, to avoid affecting quarterly results. Microsoft is also rumored to keep the entire Halo franchise. The same Bungie employee has this to say regarding why Microsoft and Halo may have split:

Apparently MS just wants Bungie to make Halo for the rest of their natural days, and Bungie doesn't like how MS is constantly trying to "handle" everything they do; the way they market their games, the way they interact with their fans (basically the fact that they do appreciate their fans), and how stingie they are with the profits (comparable to the rest of the industry). So as of today they are their own independent entity. They'll probably make Halo 4 for Microsoft, however hey are also free to create new intellectual properties for whatever system they want. (Even though they prefer the xbox platform)

Neither company has confirmed or denied any of this. We will have to wait until October 6th to see anything official.

This isn't a certainty so don't hold your breath, but according to 'sources close to the matter' Microsoft could be set to reveal the second generation of Zune portable media players tomorrow (Tuesday 2nd October). Both Microsoft Chairman Bill Gates and Design and Development Chief J Allard are expected to attend the event, where the new 3 x 1.25 inch flash-based Zune and a new, thinner hard disk-based Zune will be shown to the public. It is rumoured that the new Zunes will be capable of playing videos and will come equipped with WiFi and more storage than competing devices. Microsoft will be hoping for more success with the new Zune than with the original, which failed to make a huge impact after being hyped up to be a possible iPod-killer.

While American and European owners of the Limited Edition of Halo 3 are stuck sending their scratched disks back to Microsoft, Australians do not have to worry about any trouble whatsoever. This is because Microsoft sandwiched a piece of foam between the Halo 3 disk and the user guide, effectively keeping the disk from moving. If only this simple yet ingenious idea made its way to the rest of the world, we may not have ever had to worry about Halo 3 copies being scratched.

Over the past three fiscal quarters, Novell Linux increased its market share by 243%, and wants to thank Microsoft for this success. Linux and Microsoft fanboys everywhere, this is not what you think it is. Ever since Microsoft and Novell signed a collaborative deal in November, both companies have seen nothing but benefit from this relationship. Novell made over $100 million USD in revenue, and Microsoft has the support of Linux users seeking interoperability, the driving force behind such explosive growth.

While manufacturing costs are cheaper than ever for Microsoft now that they are building them with the 65nm "Falcon" processor, there is no price cut in sight. Instead of detracting, Microsoft will be adding a few games for the avid gamer, gratis. A leaked Best Buy flyer revealed that we may soon be seeing the full versions of Forza Motorsport 2 and Marvel: Ultimate Alliance with the Xbox 360 Platinum and Elite. This will probably boost holiday sales of the Xbox 360, considering most parents hate to buy a console for their children when the package does not even include any games for them to play.

Microsoft/Windows Update Program Manager Nate Clinton has revealed that repairing a Windows XP installation using the Windows XP CD can potentially lead to users being unable to install updates when using the latest version of Windows Update. The problem, which does not appear to be widespread, occurs because the Windows XP CD replaces all system files, including those of Windows Update. Because the latest version of Windows Update uses a file which is not present on the Windows XP CD this causes a registry mismatch which can result in Windows Updates failing. So if you have recently run a repair install on Windows XP it is recommended that you either take a look at KB article 943144, check here for a workaround or contact Microsoft.

Microsoft's new 65nm 'Falcon' processor for the Xbox 360 has been rumoured for some time now, but now it seems that Microsoft may finally have begun shipping consoles which use the new CPU. Posters on the official Xbox forums have spotted that the special edition Halo 3 consoles from lot number 734 onwards appear to have the 65nm processor, which will hopefully mean the standard Xbox consoles could start being shipped with it in the near future. With any luck, this will see an end to Microsoft's less than impressive failure rate for Xbox 360 consoles, where heat issues have been a common suspect in the so called "red ring of death". If you've just bought an Xbox 360 and want to find out if your new console is equipped with a Falcon CPU, take a look here.

In an effort to respond to feedback the company is hearing from its customers and partners, Microsoft is extending availability of Windows XP editions among original equipment manufacturers (OEM) and retail channels for an additional five months to June 30, 2008 instead of the previously planned date of Jan. 30, 2008. In addition, the company will continue to offer Windows XP Starter Edition in emerging markets where it is currently available for the rapidly growing class of hardware-constrained ultra-low cost PCs until June 30, 2010. Click here to read the full interview with Mike Nash, corporate vice president, Windows Product Management and learn more about this decision.

Microsoft is getting official with the beta release of Internet TV for its Windows Media Center customers, featuring news from MSNBC, Fox Sport clips, and a variety of other ad-supported content. Expected to go live tomorrow morning, all U.S. users of Windows Vista Home Premium edition and Windows Vista Ultimate edition will find the new beta release of Internet TV with over 100 hours of programming. The service will allow users to enjoy a range of television and video content on their PCs and TV sets without a TV tuner in their PC. The streaming video content will be supported by an advertising platform provided by YuMe and will be available to viewers for free. The content available in Internet TV comes from MSN Video and will include full episodes of TV shows such as the critically acclaimed "Arrested Development;" full-length music concerts by artists such as Chris Cornell, Snoop Dogg, Elton John, Pink, John Mayer and the Pussycat Dolls; high-quality movie trailers from major movie studios; the latest news segments from MSNBC; and sports clips from FOX Sports.

In America, Halo 3 was met with great anticipation, and stores hosting midnight launch events soon found themselves without Halo 3 copies to sell. While Halo 3 did land Microsoft $170 million USD to very first day of launch, most of that money only came from America. In the UK, there were no such lines or hordes of excited gamers. For the first part, in fear of crowds rioting for Halo 3, the UK forbade stores to sell Halo 3 until 8AM local time. And when the stores could sell Halo 3, there wasn't much to see. While Microsoft was popping champagne bottles in celebration of the anticipated "movie-like" sales, the largest line waiting for Halo 3 in the UK topped out at around "a hand-full" of people.

Microsoft Corp.'s third game in the Halo Trilogy - Halo 3, has broken the U.S. sales record for a new video game by garnering an estimated US$170 million in its first 24-hours on sale, the company said late Wednesday. The performance beat the previous record setter, predecessor Halo 2, which earned $125 million within 24-hours after its launch. That's not all. Halo 3 has beaten other records as well. More than 1.7 million copies of Halo 3 were pre-ordered in the U.S., making it the fastest pre-selling game in U.S. history, Microsoft said. The game also drew over a million Xbox Live members to play online in the first 20-hours on offer, making it the biggest day for Xbox Live gaming in history. Halo 3 launched in 37 countries at midnight on Sept. 25 and is available in 17 languages. It retails in three versions: Standard Edition ($59.99), Limited Edition ($69.99) and Legendary Edition ($129.99).

Microsoft on Thursday began phasing in a slick new version of its Live Search service in a bid to gain ground on leading Internet search rivals Google and Yahoo. The revamped search engine includes new software that figures out what people are seeking despite vague or misspelled queries. Microsoft's improved Live Search will be available throughout the United States in a week and globally by the end of October, according to vice president of search and advertising platform group Satya Nadella. "The core thing for us is to show user we made a quantum jump in search results," Nadella said while demonstrating Search at an invitation-only gathering at Microsoft's campus in Mountain View, California.

This time, we feel we can claim we are as good as Google.

Consumers report that Xbox Live is being pushed to the limits, presumably due to the high number of gamers playing Halo 3 online. Various Xbox Live users have experienced inaccurate game stats, performance slowdown, inability to access friend lists, and an inability to perform system updates. After experiencing trouble on Tuesday night, one gamer reputedly called Microsoft's help line in which a representative responded by saying that Xbox Live was experiencing network difficulties. The issue appears to be intermittent, however, as several gamers reported no problems outside of inaccurate stat data such as number of players online. Hundreds of thousands of Halo 3 owners have flocked to Xbox Live in an effort to play online since the game launched on Tuesday.

Following widespread reports of scratched Halo 3 Limited Edition discs, Microsoft will be replacing any and all discs damaged as a result of the tin's faulty disc nub. The replacing program covers the Halo 3 Limited Edition Game Disc and Essentials Disc at no charge through 12/31/07. For more details, please check out Microsoft's official disc replacement site.

Microsoft has reached another milestone with the initial Release Candidate (RC0) of the highly anticipated Windows Server 2008 operating system, now available for download. Now customers and partners can download and test-drive the latest development version of Windows Server 2008 for themselves.

Download Windows Server 2008 RC0

Ahead of the highly-anticipated launch of Halo 3, Microsoft has released updated statistics related to its Xbox 360 console. More than 11.6 million Xbox 360 consoles have been sold across the 37 countries where it is currently available. According to NPD data, US gamers have purchased more software for the Xbox 360 (24.3 million units) than for the PS3 and Wii combined (19.8 million units). There are more than 250 games available on the Xbox 360, and the console has the largest games attach rate of the current generation at 6.3 games sold per Xbox 360 owner. Xbox LIVE is currently available in 25 countries across the globe. The most popular games played over Xbox LIVE worldwide include Halo 2, Gears of War, Hexic HD, Tom Clancy's Rainbow Six Vegas, Call of Duty 3, Call of Duty 2, Tom Clancy's Ghost Recon 3 - Advanced Warfighter, Elder Scrolls: Oblivion, Crackdown, and PGR3. The Xbox 360 console was launched worldwide in November 2005.

While Microsoft is still pushing Vista hard, the company is quietly allowing PC makers to offer a "downgrade" option to buyers that get machines with the new operating system but want to switch to Windows XP. The program applies only to Windows Vista Business and Ultimate versions, and it is up to PC makers to decide how, if at all, they want to make XP available. Fujitsu has been among the most aggressive, starting last month to include an XP disc in the box with its laptops and tablets. Under Microsoft's licensing terms for Vista, buyers of Vista Business and Vista Ultimate Edition have always had the right to downgrade to XP, but in practice this could be challenging. Try the full story here.

Intel has announced the formation of the USB 3.0 promoters group, a consortium that aims to create a "super speed personal USB interconnect."

The first members of the promoter group (HP, Intel, Microsoft, NEC Corporation, NXP Semiconductors and Texas Instruments) said that USB 3.0 will deliver more than ten times the data transfer bandwidth of USB 2.0, which tops out at 480 Mb/s. The new interface will be designed to be used in consumer electronics and mobile applications and able to deal with digital media file sizes that are likely to exceed 25 GB.

Intel stated that USB 3.0 will be based on current USB technology and ports and cabling will be backwards compatible; however version 3.0 will offer enhancements for better protocol efficiency and lower power consumption. The development group will also integrate an upgrade path to optical capabilities for USB. A completed USB 3.0 specification is expected to be released in the first half of 2008.

Any techPowerUp! readers running Microsoft Office 2003 may be interested to know that Microsoft has just released the third service pack for the software. The main changes are as follows:

• Office 2003 can no longer open or save certain file formats. For more information, see Microsoft Knowledge Base Article 938810.
• MAPI forms do not run in public folders and user folders. For more information, see Microsoft Knowledge Base Article 938816.
• Office 2003 can now be configured to allow or deny specific COM components. For more information, see Microsoft Knowledge Base Article 938815.
• Some COM components with unusual characteristics may not function as expected. For more information, see Microsoft Knowledge Base Article 938814.
• Changes have been made to the behavior of Microsoft Office Document Imaging. For more information, see Microsoft Knowledge Base Article 938813.
• Attachments with the .gadget extension can no longer be opened in Outlook. For more information, see Microsoft Knowledge Base Article 938811.
• Access add-ins can no longer be configured for use by all users. For more information, see Microsoft Knowledge Base Article 938809.
• The Fast Save setting in Microsoft Office Word has been removed. For more information, see Microsoft Knowledge Base Article 938808.
• Documents saved in certain formats no longer contain the version number of Office. For more information, see Microsoft Knowledge Base Article 938807.
• Certain macros in older Excel file formats have increased security. For more information, see Microsoft Knowledge Base Article 938806.

You can download the service pack here.

The rejection of Microsoft's appeal to the European antitrust ruling against it means that there remains, at least in theory, a significant threat to Microsoft's way of doing business: bundling new features and products into its dominant Windows operating system.

In the United States, the Bush administration chose to settle the Microsoft antitrust case without challenging the company's freedom to put whatever it wants in its operating system. But in Europe, Microsoft's bundling practice became a key element in the European Commission's antitrust suit.