By Matthew Henry

SYDNEY: Microsoft today unveiled its flagship operating system, Windows Vista, and the Office 2007 suite, which the company hopes will together drive PC sales and unleash a flood of next-generation hardware, software and entertainment devices.

Microsoft hailed Vista as its most significant launch since Windows 95 in 1995, and said Vista will enable new entertainment products to be developed, adding to the 1.5 million devices and peripherals on the market that will already work with Vista.

“We designed Windows Vista and Office 2007 as springboards for our partners, for realising the next generation of computing, for a whole new wave of innovation in devices and software that offer better graphics, better connectivity and communications, and a more productive, more enjoyable experience all around,” said Microsoft CEO, Steve Ballmer.

The Windows Vista lineup includes Home Basic (RRP $385), Home Premium (RRP $455), Business (RRP $565) and Ultimate (RRP $751). Desktop and notebook PCs are already shipping with Vista preinstalled.

New features in Vista include an updated graphic user interface, a powerful integrated search feature, tagged files, the Windows Sidebar with Gadgets, family safety settings for internet security and improved performance and reliability.

Microsoft said Vista has also been designed to meet the demands of the modern digital lifestyle with new software for organising and sharing digital photos, music and video.

“Five years ago, PCs were used mainly for word processing, email and web surfing, but today people are becoming more interested in connecting to other people; digital entertainment; sharing images taken on a digital still camera,” said Microsoft president – platforms and services division, Kevin Johnson, at today’s official media launch.

According to Microsoft, over 65 per cent of homes in developed countries have a digital camera and around 60 per cent of home PCs have access to the internet.

Microsoft announced partnerships with digital content service providers for Vista including BigPond movie downloads , Print@Kodak online photo printing and Sanity Music store. All three content services will be integrated into the operating system in Australia.