http://news.yahoo.com/s/pcworld/20060713/tc_pcworld/126408 James Niccolai, IDG News Service Thu Jul 13, 9:00 AM ET Microsoft released a new version of its operating system for businesses this week that extends the life of older PCs by effectively turning them into thin-client computers. Called Windows Fundamentals for Legacy PCs, the software is offered only to customers on Microsoft's Software Assurance licensing and maintenance program. It's not a full-featured OS, but it improves the security and manageability of PCs for customers with systems that are too old for Windows XP and who aren't ready yet to upgrade their hardware, Microsoft said. The company first discussed the software last September as one of a series of perks intended to improve the value of Software Assurance, which had been criticized by some customers. Fundamentals for Legacy PCs was originally targeted for release last month. Local Apps vs. Hosted Apps The OS can run only a few programs locally, such as security tools, management tools, and document viewers, which means line-of-business and productivity applications will need to be run remotely on a server. The trade-off is that the older PCs will be able to run the latest security and management tools, and the end user experience should be similar to that with Windows XP, according to Microsoft, making help desk calls easier to deal with. Customers will also have a fully-supported OS. Among the other sweeteners offered to Software Assurance customers was exclusive access to a new, enterprise edition of Windows Vista due out in November. The OS is expected to include a hardware-based encryption system to protect data if a laptop is lost or stolen, among other benefits. It also allows customers to run four versions of the enterprise OS on one PC using virtualization software. In line with that, Microsoft announced this week that Virtual PC 2007 for Windows Vista PCs, as well as the current Virtual PC 2004 SP product, are now available to customers for free.