This week, I wrap up my look at Windows XP's enterprise features with an overview of some problems you might face with this new Windows version. Also, Microsoft has reached a settlement with the US government, although some US states allied against the company might continue litigation on their own.

As I mentioned last week, XP is a huge upgrade for home users and Windows 9x-based business users, but it's a minor one for Windows 2000 users. And this situation raises an interesting point: Although I feel that the $100 price for the XP Home Edition upgrade is reasonable, asking $200 for XP Professional Edition, especially for those users who are already using Win2K, is not. Microsoft needs to provide a way for Win2K users to upgrade at a much lower rate, perhaps an amount similar to the XP Home upgrade. I do know that the company is planning a Step-Up Edition that will let XP Home users upgrade to XP Pro at a cheaper price. Microsoft should make this Step-Up edition available to Win2K users also, but I see no evidence of that happening.

XP Home raises some other interesting concerns. Most new PCs that ship during the next year will include XP Home, which isn't applicable to most workplaces. XP Home doesn't support Win2K, Windows NT, or Windows .NET Server domains or group policies, roaming profiles, Remote Desktop, multiple processors (XP Pro supports two), Microsoft IIS, the Encrypting File System (EFS), Offline Files and Folders, and other XP Pro features that are useful in business situations. Most alarming, XP Home doesn't support the Automated System Recovery (ASR) feature that's new to XP Pro.

ASR is a new option in NT Backup that replaces the Emergency Repair Disk (ERD) functionality from previous versions of Win2K and NT. ASR stores crucial system files and system-state files from the system and boot partitions and backs up data, providing a way to restore an otherwise unbootable XP system. ASR is a crucial reliability enhancement, but Microsoft developers integrated it into NT Backup in such a way that the XP Home version of NT Backup is somewhat bizarre. Originally, the company planned to forego NT Backup in XP Home but added it to the XP Home CD-ROM at the last minute. As such, the application still includes references to ASR, and even seems to let a user create ASR backups. However, because XP Home doesn't support ASR, this functionality isn't present. The XP Home CD-ROM includes the gory details in a README file.

If you're a small office/home office (SOHO) user who's considering XP, examine XP Home's limitations before succumbing to the $100 savings. And as always, larger companies should look into volume licensing for a better deal on XP Pro.

From an architectural standpoint, XP has changed little from Win2K. XP features a slightly tweaked Win2K kernel, now dubbed the Windows Engine (ah, marketing) that includes support for the technologies we discussed last week.

XP raises the limits for numerous system resources, including the size of the registry and device drivers. It supports faster boot times, logon, hibernate and resume, and application startup than previous Windows versions. I mentioned last week that XP includes a side-by-side DLL feature that seeks to end DLL Hell. As a reader noted, Win2K included a rudimentary version of this feature, but that version required developers to rewrite applications to support it. In XP, Microsoft enhanced this feature with a technology called shared assemblies, which lets unmodified applications use side-by-side DLLs through the addition of an XML-based manifest file. This manifest describes an application's dependencies and ensures that older applications always use the correct DLL versions.

Most public complaints about XP involve invasive technologies such as Passport and Windows Product Activation (WPA). Contrary to reports, Passport is an optional XP feature, and you'll soon be able to manage it locally on an internal network. When corporations maintain their own Passport servers for their employees, I think we'll see Passport usage take off. But Passport isn't the privacy bugaboo that so many pundits seem to think it is. If you're uncertain, don't use it.

WPA presents similar concerns. Sure, it would be more convenient if we could use the same copy of Windows on two or more PCs, but the reality is that the Windows license has restricted OS use to one PC for more than a decade, and this technology simply enforces that license. WPA is a nonevent for corporations with volume licenses because they'll have access to a version of XP that doesn't include WPA. Legitimate XP users have nothing to fear from WPA, although weird exceptions will occur (including a person who carries a detachable boot partition between his home and office, for example). But Microsoft has watered down WPA so much since its debut in January that most users will probably never have to deal with it.

Does XP have any real downsides? Sure. It requires headier hardware than any previous Windows OS, so it's unlikely that 1999-era PCs that came preinstalled with Windows 98 will be great upgrade candidates. The irony is that users of these machines are exactly the right market for XP, barring cost. Meanwhile, most Win2K users already have the horsepower needed to upgrade, but the upgrade is expensive and generally unnecessary.

In related news, last week Microsoft announced that it had reached a settlement with the US government in its years-old antitrust case. I've written an evaluation and opinion of the settlement (which I consider a travesty of justice) for WinInfo Daily UPDATE. You can read it here.