On Tuesday, Microsoft announced incentives that it hopes will keep customers buying Windows-based PCs during the 2006 holiday selling season, even though Windows Vista won't ship until January. According to Microsoft, consumers who purchase new PCs preinstalled with Windows XP between October 26, 2006 and March 15, 2007 will be eligible for free or discounted versions of Windows Vista. A similar program is in place for Office 2007 as well.

"Our customers can shop for a new PC with confidence this holiday season because of the Express Upgrade to Windows Vista and Office Technology Guarantee programs," says Microsoft corporate vice president Mike Sievert. "These programs ensure people will have a great experience with their Windows XP-based PCs today, and an even better one when Windows Vista and the 2007 Microsoft Office release become available."

The Windows Vista Express Upgrade program is available to PC makers and system builders, and customers who wish to take advantage of this offer will need to ensure that the PC they're buying offers the upgrade through the manufacturer. Confusingly, the offers will vary from country to country. More confusingly, PC makers can set the terms of the upgrade, so the offers will also vary from company to company. Microsoft says only that the Vista upgrade can be offered for "free or at a discounted price (shipping and handling charges may also apply)."

Here's how the upgrade will work. Microsoft will provide PC makers and system builders with upgrade discount coupons for Windows Vista that they can offer to their customers. In the US, for example, the following upgrade paths will be available:

Free (or nominal fee) upgrades...

- From Windows XP Media Center Edition 2005 to Windows Vista Home Premium.

- From Windows XP Professional, Windows XP Tablet PC Edition to Windows Vista Business

- From Windows XP Professional x64 Edition to Windows Vista Business 64

Upgrades offered at a 50 percent discount off of the retail price...

- Windows XP Home Edition to Windows Vista Home Basic

- Windows XP Home Edition to Windows Vista Home Premium

Additionally, consumers who purchase new PCs with a preinstalled version of Microsoft Office 2003 may be eligible to receive upgrades to comparable Office 2007 product versions. These offers are a bit murkier than the Windows Vista upgrades, and will only be "made through participating computer manufacturers in qualifying locations." The cost of upgrading is typically free plus the cost of shipping. However, Microsoft notes that "customers will need to provide valid proof of purchase and cover shipping and handling costs associated with the upgrade. Customers in North America will receive a coupon with the purchase that must also be submitted."

Major PC makers such as Dell, Fujitsu, HP, Gateway, Sony, and Toshiba have all announced support for both upgrade programs and customers can expect to see the offers appear on their e-commerce Web sites in the days ahead. "Dell customers can rest easy knowing that the Windows Vista Capable PCs they buy from Dell now and during the holidays are ready to run the operating system when it becomes available," said John Medica, the senior vice president of the Dell Product Group.