This new feature, called Windows Anytime Upgrade, is in the most recent builds of Windows Vista (February CTP, build 5308)

Retail customers have four choices:

- Windows Vista Home Basic is for cost-conscious PC buyers who want basic functionality without a lot of extras. It uses the simplified Vista user interface and doesn't support DVD burning or Media Center features. This version will probably end up on the entry-level PCs for every major manufacturer, with encouragements to upsell.

- Windows Vista Business adds the Aero interface, support for Tablet PCs, integrated desktop search, and other goodies. It's not clear whether it includes Media Center features, but given its positioning - small to medium-size businesses that lack IT departments - it's reasonable to assume that those pieces aren't there. I expect to see this SKU as the baseline Windows Vista offering on entry-level PCs pitched at business customers.

- Windows Vista Home Premium adds the Aero interface, integrated desktop search, Media Center features, and support for DVD burners. It's unclear whether it supports Tablet PCs, but I'm guessing it doesn't. This will be the default installation for most mid-range PCs. In fact, it's a simple test: If the computer has a DVD burner, it will probably get Home Premium.

- Windows Vista Ultimate is positioned as the one that "has it all." It includes all the features in the other retail versions as well as corporate features like BitLocker drive encryption. Is it a complete superset of the Enterprise edition? That's not yet clear.

Before you start envisioning customers standing, in hopeless confusion, in an aisle at CompUSA trying to decide which box to buy, remember that roughly 9 out of 10 copies of Windows are sold with new PCs. For the most part, PC makers will make the choice that matches the hardware and will do their level best to sell upgrades. Those rare consumers who do buy a retail box generally tend to be enthusiasts who will naturally gravitate to the Home Premium and Ultimate versions.

Corporate customers who have PCs covered by Microsoft Software Assurance or a Microsoft Enterprise Agreement have it easiest of all: They get one version, Windows Vista Enterprise, which includes BitLocker encryption, Virtual PC Express, and the Aero interface. The idea is to give corporate customers a single image that they can customize and deploy to meet their own needs.

The biggest change of all? One retail DVD includes all four versions. The product key, which is entered at the beginning of the installation process, determines which version gets installed. That's potentially very good news for retail customers, who should be able to use any Windows Vista media to reinstall the operating system (provided they haven't lost the product key).