I'm looking forward to Linux gaining enough of a foothold for someone to make a cheapo computer that doesn't even bother with x86. Seems like ARM, MIPS or PPC are contenders at the low end.

Sooner or latter, someone is going to be able to reuse the CPU/GPU from some kind of iPhone to make a full sized computer...

Those limitations will only make the case for Linux stronger.

Nobody is forcing them to ship with Windows. The only thing that has been forcing the OEMs to include Windows was "the market," which expected to get Windows (unless they were buying a Mac) or, more precisely, the market expected to be able to run the same programs they used at work, or the programs they already owned, or the programs that they wanted to buy / download / develop.

Increasingly, the market is willing to forgo Windows -- whether it's students happy with OpenOffice or government purchasers declaring Linux their new standard. And MS is just going to make that easier by creating a well-defined (and limiting) XP "ghetto."

Of course, a lot of the market is still going to want to run Vista, but they're not going to manage that on these limited machines anyway, and a lot of the people who buy these will be buying it as their third machine and probably have a spare XP license lying around anyway. (If they don't, and they want to put XP on it, that's going to be increasingly hard to do after the fact because MS doesn't want to keep selling it in the retail channels). But people who buy more capable hardware aren't really in this segment -- they're buying a traditional budget laptop. Rather than being upset about these limits, it might be more appropriate to ask why so few budget laptops vendors offer Linux as an option.

Historically, Windows cost 5%-10% of the price of the machine ($50-$100 on machines that ran $1000-$2000). So $32 is in line with the pricing of these laptops at $300 to $600. This is a genuinely new market segment, however, and $32 buys a lot of marginal improvement in features in that price range. If the other mfrs follow ASUS' lead and offer an equally-priced Linux version with additional features -- so the actual price of bundled Windows becomes a tangible thing in the price/performance evaluation of the machine -- I think a fair number of buyers will be willing to at least give the Linux version a shot. And Linux advocates have always said that's all Linux really needs. So here it is.

Seems like a good plan as a work around for machines that art too weak to run current version of Vista. While the rest gets forced to Vista with the June 30th 2008 and Jan 31 2009 EOL for XP. http://www.microsoft.com/windows/lifecycle/default.mspx

I'd need to know more about how the Atom works with various apps on the ASUS Eee 900 XP, but if it does have HT and longer battery life, that would more than make up for its probably slightly weaker CPU performance (as compared to Pentium M Celeron 900).

Heh...1 GB memory...I suppose thats because < 1Gb ram can't run vista. Although 1 Ghz cpu is probably also rather sluggish for vista as well...

Talk about the tail wagging the dog...
Only a monopoly would force terms like this instead of letting market forces determine them.

What about the intended usage of a device like this would demand Windows?
The usual excuse, gaming, is solved by their own hardware limitations.....anything old enough to run on them will run in Wine.

How about a cheap xp license to those who intend to convert their eeePCs over to xp? Not that there is a practical way to enforce the use of that license only on the eeePC...

Monopolist bastards. Bring on linux.