Page 133 offers what seems to be the closest thing to a smoking gun regarding the reason for the degraded Vista Capable Logo, from a February 2006 e-mail:
I wanted to give you an update on a conference call I was on yesterday ... We have removed the requirement for Vista Capable machines ... This was based on a huge concern raised by Intel regarding 945 chipset production supply and the fact that we wanted to get as many PCs as possible logo'd by the 4/1 REV date. ... From my standpoint, the potential issue this creates is placing more machines that, while Vista Capable "logo'd," will ultimately not be able to deliver the full Vista experience if the customer chooses to upgrade at launch.
Intel's older 915 chipset, used in many bargain notebook PCs at the time, was unable to run Vista's Aero Glass interface because it didn't have the graphics muscle. Even as late as February 2006, e-mails seem to indicate the strength and size of the bargain-price notebook PC market took Microsoft by surprise. As a result, Microsoft must have felt like it needed to dip down into that low-end market with a version of Vista that would run on those systems. Intel was happy with this outcome, obviously, but this backtrack on the Vista Capable logo set off several concerned replies within Microsoft, including this one:
By removing the WDDM [Windows Device Driver Model] requirement we are in danger of disappointing many customers regarding the full Vista experience if they choose to upgrade after we launch.
Sure enough, an October 2006 e-mail indicated that danger had been realized:
The problem with the "Capable" program is that the customer who buys a "Capable" machine and Vista retail does not know that "Vista Capable" != everything just works. The bar for getting such a sticker was/is too low or the marketing around the sticker was/is not specific enough as to what it actually means; Vista installs, runs but there is no actual submissions of systems going through any sort of "Vista Capable" experience validation (as opposed to what happens in the actual DFW [Designed for Windows] Logo program).
This retreat took at least one OEM, Hewlett-Packard, by complete surprise, as this late-January 2006 e-mail showed:
In our August 7x7 with HP you both [Jim Allchin, Co-President Platforms & Services at the time, and Senior VP Will Poole] committed to HP that we would not move off the WDDM requirement and HP made significant product road map changes to support graphics for the full Vista experience. Ramano [John Romano, Senior VP of HP's Consumer PC Group] specifically told Jim that HP will invest in graphics if MS would give him 100% assurance that we would not budge for Intel. This goes beyond desktop for HP as their mobile guys moved off 915 early for the same reasons.
Microsoft's current predicament might be best summarized by this e-mail describing a February 2006 meeting:
Wal-Mart was very vocal today regarding the Windows Vista Capable messaging. They are extremely disappointed in the fact that standards were lowered and feel like customer confusion will ensue. ... They also went so far as to say they wish Windows Home Basic was not even in the SKU lineup. ... Please give this some consideration; it would be a lot less costly to do the right thing for the customer now than to spend dollars on the back end trying to fix the problem.
Isn't that prophetic?