According to Smarthouse.com, orders have come down from on high to rewrite more than 60 per cent of the consumer version of Vista in a bid to get it ready for the 2007 CES show in Las Vegas.

In an effort to meet a dealine of the 2007 CES show in Las Vegas Microsoft has pulled programmers from the highly succesful Xbox team to help resolve many problems associated with entertainment and media centre functionality inside the OS. The team are also working closely with engineers from the Intel Viiv team. and it is now expected that the next version of Viiv could be delayed to line up with the launch of the consumer version of Vista at the 2007 CES Show in Las Vegas.

One of the key components of the consumer version of Vista is the Media Centre code. This will be an optional package in the same way that Microsoft currently sell a Professional and Home version of XP. With Vista there will not be a seperate Media Centre SKU.� Microsoft has also admitted that it has major problems in it's Windows division and has has immediatly initiated a total restructure of the division, a move that comes after a costly delay in rolling out its Vista program.

The company has said that it is restructuring its Platforms & Services Division and 'enhancing' the leadership team. At the heart of the changes is the elevation of Steven Sinofsky to senior vice president of the Windows and Windows Live Group. 'Steven's leadership, management and technical skills are well documented and evident in the kinds of products he ships and the type of work environment he creates,' said Ray Ozzie, Microsoft`s chief technology officer.

'I`m looking forward to working with Steven and his team in delivering software-based services that extend the value of our offerings by providing a more seamless connection between our desktop products and the Web.' Analysts estimate that Microsoft's delays in releasing the next generation of its operating system, known as Vista, have cost it about $500 million.

Update: Microsoft flatly denied the report.