all it appears to be is little more that WinXP Home modified to be more audio/video centered than the standard XP distribution. it's certainly not a *new* thing, as it has been known for quite some time- you kids are just slow finding out about it (heck they even talked about it coming out at the CeBIT computer expo here in Germany during the summer).
nothing to write home about, though i do admit it makes a nice addition/improvement over multiple entertainment system devices (ie: tv, audio player, video player, etc.) by having it all-in-one. but then you can do this with most any current modern OS anyway. not much point in switching if you already got something that can do the same.
i guess it would make sense to provide this with new computers as a 'home entertainment' box.
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But a whole new OS sounds so much more worth US$380. Think of the money Microsoft would lose! Think of the cash flows, the share prices! Think of the children! (Well, Bill Gates' children at least.)