LOS ANGELES -- Microsoft's Windows Hardware Engineering Conference is winding down, and I'm trying to figure out what I've seen that's important. I mean really important. Not data, but real information. I'd say three things. One is the Rally technology I wrote about on Tuesday. Another is the speed that solid-state memory (like flash RAM) is showing in overtaking hard drives as primary storage for PCs. And the third is how really just plain neat the Windows Home Server product looks. You may not have heard much about it yet, but trust me, by the time it ships late this year, you're going to want it.How important is Home Server? So important it was demoed during Bill Gates' keynote speech on Monday, along with Rally. Later I sat down with Steven VanRoekel, whose title is director of product planning or Microsoft's server solutions for a review of Home Server. He has a different way of looking at Home Server's importance: There are, he said, 40 million households that might be Home Server customers.

That's a real marketplace.

Home Server does some things that everybody with two computers or more needs. And it does these things in a way that demonstrates how hard Microsoft has worked to make sure that everybody can do them, not just IT geeks.

Home Server is built on Windows Server 2003 (Microsoft decided last year not to wait for Vista), but the operating system really isn't important. Home Server is intended to be an appliance. You'll buy it just like you buy a new PC -- get the hardware, and the software will come with. (Home Server will be available to system builders, so you'll see all kinds of hardware.) Install it on your network (just the box -- it doesn't have a keyboard or monitor) and run an installation CD on any network PC. Tell it who its users will be and it starts to work.

Home Server will back up every PC on the network -- and back them up very intelligently. It's a single-instance archive: Files that are duplicated on more than one PC will be stored only once on the server. And all the files are backed up. In the event of a disaster that takes out a PC's hard drive, for example, you'll be able to restore that machine to a new drive.

It works with mixed networks. You have to install it from a PC running XP or Vista, but once that's done, you can back up machines running Mac OS X or Linux or whatever. And it has some security built in, so you can configure access to the archived files and folders.

It will share media files, it does network health monitoring and reports on the status of each computer on the network, it does a daily incremental backup of each machine, and it works with a Microsoft Web service to give you remote access to your files: You get a free domain name, and you can control access so that you can let Grandma share a folder of pictures but keep her from accidentally deleting your tax records.

According to VanRoekel, Microsoft expects Home Servers to cost in the same range as PCs, from the low hundreds of dollars for basic boxes to big bucks for systems from vendors that build applications on top of Home Server's features.

Home Server has obviously been designed to be as user-proof as possible. It doesn't use RAID or fancy hardware recovery schemes, for example, because, as VanRoekel said, few users would understand how to set something like that up. Instead, if there's something so important you want to make sure you always have a copy, you tell Home Server to make multiple copies on different drives.

The hardware for Home Server looks like it will be as interesting as the software. There's a Home Server logo program, and one of its requirements is that the hard drives in boxes used for Home Server must be accessible to users, so they can swap them in and out. The demo ran on HP's SmartMedia server, with four drive bays and four USB ports for external drives. Round up whatever hard drives you've got and put 'em in, and when you need more storage add it on. What could be simpler?

Backups of every PC in the house? I need that. Restore my PC after a disk crash. I need that, too. Better, more secure, file sharing, even remotely. I want it. I want it all. And I suspect I'm just one of 40 million. This could be the answer to the question of where Microsoft's next few billions would come from once everybody on the planet owned a PC. Develop a product that looks as good as Home Server and sell everybody another PC.