Gates brings it home for Microsoft

The digital living room is taking many forms, and Microsoft is hoping to have a place in all of them.

In his annual address to the Consumer Electronics Show in Las Vegas, chairman Bill Gates showed off a new home server and a new crop of small entertainment PCs, as well as new software that will allow the Xbox 360 to serve as a gateway to Internet-based television.

Gates kicked off his keynote before a crowd of about 5,000 at the Venetian by saying he would be back next year, despite plans to step down from full-time work from Microsoft in 2008.

"After that I'm not sure they'll want to invite me because I might talk more about infectious diseases," he said, referring to his philanthropic work. "If they want me, fine."

Gates' speech also served as a coming-out party for Windows Vista. The operating system was released to businesses in November and goes on sale in new PCs and on store shelves at the end of this month.

In particular, Gates showed a number of new PCs designed for Vista. One of the more striking designs is a round, white Vaio Media Center PC from Sony. Another of the new PCs is an all-in-one from HP that features a flip-up LCD touchscreen. Gates also showed off a new tablet PC from Toshiba, one of the first models that will include a second SideShow display for access to alerts and notifications even when the screen is closed. Also on display will be a new ultramobile PC from Medion.

"The strength of Windows has always come from the ecosystem around it," Gates said.

On the home-server front, Microsoft is touting a new crop of devices that consumers can use as a central place to back up and store videos, pictures and music. The devices, due out later this year, will use Windows Home Server software from Microsoft and be built by computer makers, including the MediaSmart Server from HP. The software from Microsoft is based on Windows Server 2003, but Microsoft is aiming to make the interface much more friendly to consumers.

Gates said that the home server will link up information stored on PCs, Xboxes, the Zune and even allow remote access for when you are away from the home. "We think it's a category that will explode in importance," Gates said.

Ideally, the devices would cost somewhere between £300 and £400, not much more than current network-attached storage products that HP and others have been touting for managing home media. HP currently has two Media Vault storage products, the MV2010 and the MV2020, ranging from £249 to £349.

Gates also touted the high-end version of the new operating system, Windows Vista Ultimate. To lure people to that pricier version, Microsoft is offering some additional features, known as Ultimate Extras.

One of the extras is DreamScene, which lets consumers have a video, rather than a still image, as their screen backdrop. Users can either run their own digital video or choose pre-made video such as a cascading waterfall or a field of windswept sunflowers.

Microsoft included a reference to Ultimate Extras in test versions of Vista dating back to June, but had not detailed the perks until now.