When Microsoft CEO Steve Ballmer takes the stage Wednesday night to address attendees at the annual Consumer Electronics Show in Las Vegas, he's expected to announce the availability of a beta version of Windows 7.

Windows 7 screen shot.
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One thing he almost definitely won't say: Skip Windows Vista and wait until Microsoft releases Windows 7 to upgrade operating systems.

Microsoft is in a bit of a netherworld with Windows right now. On the one hand, despite finally being stable and getting better reviews as of late, Windows Vista's reputation is still scaring off some customers enough that they're sticking with the 7-year-old Windows XP. On the other, Windows 7 is due to be released later this year and has garnered generally positive reviews from early testers.

"Lots of customers are asking Microsoft for guidance right now," Stella Chernyak, a director in Microsoft's Windows Client product group, said in an interview. "Are we committed to Windows Vista? Yes, absolutely."

Chernyak said Microsoft is still dealing with lingering "misperceptions" about Windows Vista, but that more and more customers are happy with the operating system. An internal Microsoft study recently found that 90% of people using Windows Vista at home or work would recommend it to others. "The reality is that it is a mature product right now," she said. "The ecosystem is supporting it, and issues are solved." That's easier said than believed, even though it's largely true.

While Microsoft continues to patch bugs -- a new Vista service pack is due in the first half of the year -- and push hesitant customers to buy Vista, Microsoft's Windows client business grew only 2% in the company's most recent quarter. And though many business customers are buying computers with Windows Vista on them, some continue to downgrade their new computers to Windows XP. With the economy in the doldrums, companies are giving extra scrutiny to sweeping technology changes like operating system upgrades.

Companies increasingly are asking Microsoft how an upgrade to Vista will pay off when they decide to upgrade again to Windows 7 in the next few years, Chernyak said. "We have deep architectural changes in Windows Vista, and Windows 7 will build on that," she said. "We just expect a much easier transition." Companies that have done the grunt work of upgrading to Windows Vista won't have to do as much with Windows 7, since Windows 7 requires the same hardware as Vista and will properly run a "vast majority" of applications that run on Vista. However, with two such upgrades looming -- to Vista and then 7 -- some companies may look for ways to only upgrade once.

Microsoft has a few warnings for companies that say they'll wait until Windows 7 to upgrade from Windows XP. Chernyak cautioned that applications might run out of support on Windows XP before businesses ever get around to upgrading to Windows 7, and that applications and devices that don't work with XP won't work with Vista. For those who will never be convinced, Chernyak has some advice: At least begin testing applications and hardware with Windows Vista now, because it will eliminate potential headaches with an XP-to-Windows 7 upgrade.