It's been a controversial decision, but it looks like the OLPC XO has completed its transition from revolutionary education project to just another tiny Windows laptop with a useless keyboard -- albeit one with a pleasantly whimsical design. Yep, it's official: Microsoft and OLPC just put out a joint press release saying that XP-loaded XOs will be available starting in August or September, with some countries to get the machines as soon as next month. Users will get all the regular functionality of XP -- it's basically the same build as on the Eee and other ultraportables -- but Microsoft's spent over a year developing specialized drivers for the XO's various features like e-book mode, the writing pad, and camera. (We're pretty certain that doesn't include mesh networking, but WiFi is supported.) XP is too big for the built-in 1GB flash chip, so it'll come preloaded on a 2GB SD card, leaving just about 1.5GB free total for apps and media. It seems like Microsoft is thrilled about this partnership, but it's a not going to make NickNeg's search for new vision at the top any easier. As for Sugar? You'll still be able to get it, but we have a sinking feeling about its future. Demo video after the break.

If you've been watching CNN's election coverage lately (and we think you have), then you've probably seen anchor John King tripping the light fantastic on the channel's Magic Wall touchscreen. Apparently, Microsoft has come up with its own version of the board -- essentially a Surface flipped on its side and mounted. The device, known as the TouchWall, joins a handful of finger-friendly prototypes that Microsoft Research is working on (including a spherical unit we assume will be used strictly for world domination campaigns). The 4-foot-by-6-foot "wall" uses inexpensive infrared sensors and a rear-mounted camera -- which can be added to a variety of surfaces -- in order to create the hands-on experience. The company appears to be targeting this as a low cost "intelligent whiteboard" solution, so hopefully they'll be turning up in schools, small businesses, and the Engadget offices soon. Check the video after the break to see it all in action.

[Via CNET]

Remember Anascape Ltd, the little "gaming company" that sued Microsoft and Nintendo back in 2006 for controller patent infringement? Well, it's payday to the tune of $21 million after a jury found Nintendo's Wii Classic, WaveBird, and Gamecube controller designs all guilty of violating Anascape's patents. Nintendo will appeal naturally while Microsoft settled the case before the matter ever went to trial. Now go ahead and Google Anascape with the challenge of finding a single service or product offering. Oh, did we mention that they are based in the patent-lawsuit friendly state of Tejas? Patent Trolls? Oh, you betcha.

Anascape... there is none.

Remember that rumor of a spherical Microsoft Surface bouncing around the labs of Redmond? At the time, we didn't get it. Now, imagine if you would the combination of a multi-touch sphere with these 360-degree games from SusiGames. Oh sure, the games have been kicking around art shows and design exhibitions for several months now, and rely upon a modified Wiimote and decidedly non-touch-sensitive SusiSphere for interactivity. Nevertheless, the union of the two concepts sure is tantalizing. Check the game play after the break.

Sounds like that rumor about a new, smaller Xbox 360 coming next year might have a shorter life than a red-ringing console. Specifying the release of "slimmed down SKU in 2009", Microsoft representative let us know today that "While we don't normally comment on rumors like this, we can tell you that we have no plans to release a new console in 2009". Yep, rumor assassinated, just like that. Of course, there still exists the possibility that Microsoft's just playing coy to prevent a little bit of Osborne effect from creeping in during their heated battle with the PS3 -- but they did go out of their way to directly comment on the rumor, so take it as you will.

Microsoft really wants you to do some video conferencing, okay? Why else would they release the LifeCam VX-5000 and VX-500 webcams? Apparently gunning for some of that juicy video-chat market, the boys and girls in Redmond have introduced two models sure to find a home perched atop any monitor. Both cams sport VGA resolution and play nice with Windows Live Messenger -- we assume they're USB 2.0 devices, but Microsoft doesn't seem to want to tell us. The company is also releasing a headset, the LifeChat LX-2000. The VX-5000 will be available in June for $49.95, while the VX-500 and LX-2000 hit shelves this month for $16.95 and $29.95, respectively.

We think we've already got a handle on the various chipset revisions planned for Microsoft's too-beautiful-for-this-world Xbox 360*, but it looks like that planned 45nm "Valhalla" combined CPU / GPU motherboard design we've been hearing about might also come in a redesigned, smaller case. That's certainly news to us, but TG Daily has the refresh happening on the same fall-2009 timeline we've been hearing about, so at least all these sketchy rumors line up. We'll see when we see -- it sounds like the 65nm Jasper units are coming off the line for that August release in the meantime to keep us all warm at night.

*Guess which Engadget ed had his 360 go RRoD over the weekend? You only get one try.

[Via Xbox 360 Fanboy]

Well, Microsoft finally got SP3 out the door for you stubborn Vista-resistant XP users, and we're dying to know how you like it. That's right, you. See, our resident guinea pig intern hasn't felt any performance improvement, we've received tips from people who have seen a speed bump, and problems have cropped up as well -- we've heard reports of sporadic reboots and crashes, some of them AMD-related. But hey, forget all of them... how has SP3 changed your life?

HP's got some new 2133 configs out as of tonight, including options for "downgrading" to Windows XP on models over $700 -- more or less as expected. They're up to eight base configs ranging from $500 to $820, so if you've been thinking of picking one up you've certainly got plenty of options to choose from.

[Via HP 2133 Guide]

Microsoft is still toiling away at the Zune, but there isn't a whole terrible much to show for it so far in regards to market impact. They just broke the 2 million mark, almost a year after they hit 1 million in May 2007. That means growth has hardly accelerated since the second-gen players hit the scene. Zune's overall market share has grown from three to four percent, but that's most likely a steal from Creative (which sunk from four to two percent) than a steal from Apple or second-place SanDisk (with a billionty and 11 percent, respectively). But don't worry, we're sure that 2.5 update is going to change everything.

While Microsoft has seen it fit to keep XP around as its "relatively non-bloated OS" alternative to the Linux that has dominated this new category of "ultra low-cost PCs" (ULPCs), they're certainly not giving away the farm. Microsoft doesn't want this version of XP Home creeping into mainstream laptops and desktops, where it might compete with Vista sales and high-margin machines from PC manufacturers. To that end, Microsoft is setting the limits for ULPCs at 10.2-inch screens, 80GB of storage, 1GB of RAM, 1GHz processors (with some exceptions) and no touchscreens. The upshot is that licenses for XP will go for $26 in developing nations and $32 elsewhere. Too bad the XP faithful among us will need to try a bit harder to wrangle XP onto new machines of theirs that don't fit these narrow specifications.

Microsoft's no stranger to appealing antitrust decisions before the European Commission's Court of the First Instance, and it looks like it's saddling up for another go 'round: the software giant has decided to appeal that $1.3B antitrust fine handed down in February. Saying that it was only filing as part of a "constructive effort to seek clarity from the court," Microsoft has asked that the decision be annulled. Yeah, that seems pretty clear. As always, our suggestions that this be resolved with a GTA IV / CoD4 round-robin deathmatch on Live have gone unheeded in favor of tedious paperwork and months of delay, but we're still holding out hope.

[Thanks, Hosain]

Ever wonder where Zunes are designed? Well, right now it's all done in a fairly non-descript and temporary office building on Microsoft's sprawling campus in Redmond. (Soon enough a few hundred Zune employees will be packing up and moving to a new building that's currently under construction, though.) We recently got a chance to peek around the cube farm and spend some time with employees in the laid-back Zune lounge -- check it out!

Microsoft has been touting its Fone+ project for a little while now, but it looks like the company is starting to step up its efforts a bit further, with the new head of Microsoft's Unlimited Potential Group, Craig Mundie, reportedly leading the charge to increase the focus on the project aimed at bringing cellphones to the poor. This isn't a case of simply handing out as many barebones handsets as possible, however. Instead, Microsoft wants to use the cellphones (which are described as a "low-to-mid-end smartphone") as an alternative to computers like the OLPC, an idea the company has been tossing around since before the Fone+ project even had a name. To make things a bit more practical, the cellphones would be paired with a dock that hooks up to TV, resulting in a system that Mundie says is "a lot cheaper than having to buy a whole separate computer." Unfortunately, while it is upping its efforts, Microsoft apparently still isn't ready to provide any sort of timeline about when we can expect to see an actual product, and Mundie adds that the company continues to "explore and look at both phone-up models and PC-down models" to make computing more accessible to the poor.

[Via Phone Scoop]

While our primary gripe with the 360 continues to be drive noise, any improvements to the console that might subdue the impression it's eating our games and heating our continent would certainly be welcome. Microsoft's Jasper 65nm chipset has been in the works for the Xbox 360 for a while, and now reports are coming fast and furious that Taiwanese companies are picking up the contracts for the chips, and the new setup will be sucking down less wattage and pumping out less heat by August of this year. After that attention will turn to the rumored Valhalla, to be built by the same Taiwan Semiconductor Manufacturing Co., which will combine the CPU and GPU into a new super-efficient chip for fall of '09 if these reports are anything to go by.

[Via Joystiq]