^^
That's good news. It must be noted, though, that MS would like existing users to abandon old machines with XP on it, but given that OS' long life and huge downgrade adoption by most Vista users entitled to it, there are a lot of modern enough systems still using XP, so, given the higher resources XP leaves free for applications, most professional users will keep on delaying system upgrades until either new versions will require it, or, for power users, until future high-end system with Win 7 will offer a significant performance boost compared with current or recent past high-end system with XP. XP is a blessig for users, now that it has acceptable reliability, but it's a burden for MS. A burden it was forced to accept supporting until mid 2014, as its success was so huge (and Vista so appalling) that killing it would have killed MS' monopoly.

I hardly see how having a reliable product in XP is going to stop people from upgrading to a new stable operating system in W7. If that was the case no one would ever upgrade to anything new.

XP is getting a bit long in the tooth, I think the massive preorder numbers for Windows 7 highlight that people want the new OS.

^^
No, it's different, simply no one will RUN to upgrade. Sooner or later most will, but don't expect people to upgrade XP systems that still do their job without problems. Win 7 is anyhow in a better situation than Vista, as delaying the upgrade isn't as bad for MS as refusing Vista whenever possible up to updowngrading it to XP.

Edit: Obviously, some Windows 2000 users and most Vista users will welcome Win 7 and this, besides new PC's, will give Win 7 a more than decent success, but XP has a >1 billion user base that MS craves to persuade to upgrade, that instead will do it very slowly.

Microsofts plan!

1. Microsoft releases Vista ,Vista gets panned by people

2. Microsoft fixes Vista ,Vista still gets panned by people

3. Microsoft finds out that Vista with a different U.I is quite well liked

4. ???? or you could say release Windows 7

5. Profit

^^
You must be on Ballmer's payroll: you deliberately omitted the "Steal underpants" phase!

How can you qualify that statement given Microsoft have already deferred close to US$2 billion dollars in Windows 7 presales to its Q2 financials(only preorders until Sept 30th) and there are articles from Amazon saying its their biggest grossing preorder of all time.

It looks to me like plenty of people are RUNNING to upgrade

Not necessarily. Net income and revenue is down for Microsoft, but the reason their results are considered impressive, and the reason that their stock shot up like a rocket, is because they've done some cost cutting. Some of that is probably contributed to the workers they let go earlier this year. Next quarter's financial results will be different though as they will have Windows 7 baked into them.

Not to mention it's the Xmas shopping quarter so it will not only have the Windows 7 launch but the biggest retail period of the year.

Looking around in various forums, blogs, etc, unsatisfied Vista users are the most eager to upgrade. Those deferred $2billion obviously include OEM copies, but even if they were only for upgrade licenses, it would mean preorders in the ten million order of magnitude, that's one-figure percentages of total XP users. But it could more easily be two-figures percentages of Vista users.

Obviously, as Vista is so hated and Win 7 is an evolution ironing out its most serious flaws, it's quite a safe bet that Win 7 will almost monopolize preinstalled market in little time, but this doesn't change the fact that MS would really like to get some more money from that 1billion XP users, but only a very small part of them will open their wallets and make Ballmer happy in the short term.

You are right that this won't prevent Win 7 from having a lot more success than Vista, but MS' wish to convert XP users ASAP is a totally different thing.

I am not upgrading from XP. No need for me to. When I get a new comp, I will get Win 7 on it.