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Microsoft has two operating system lines. There's the Windows NT-derived operating system now selling as Windows 7 and Windows Server 2008 R2. And there's the embedded Windows CE-derived operating system, currently shipping as Windows CE 6.0 R3, which sits at the heart of Windows Phone 7. The Windows CE family is already available and running on ARM processors, and has been for many years, so the assumption is that the rumor is talking about the Windows NT family: Windows (or some derivative) for ARM.
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Interesting article but here is the kicker

But battery life isn't the thing standing in the way of widespread acceptance of Windows tablets. The user interface is the problem. The user interface has always been the problem. The iPad has an interface designed for fingers, the Galaxy Tab has an interface designed for fingers, the future webOS tablet will have an interface designed for fingers, and it's no real stretch to suggest that every successful tablet that will ship in coming years will have an interface designed for fingers. And it's this interface that Windows lacks.
 

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There is nothing to stop MS from putting a finger friendly user interface on top of Windows 7. I don't see it working well, because Windows 7 requires too many resources, but it can be done. Many small devices are based on Linux, which is far from finger friendly, but it works because of the interface layered on top of it and the relative efficiency of the underlying O/S.
 

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I've used windows on touch screen before, and it's not that big of a deal

inking on a windows tablet (vista was ok actually, and win7 is really nice) works really well


the windows that you install on a desktop isn't the same package that you'd install on a small dedicated machine

once you streamline the OS to suit a specific hardwdare config, it's not that big (relatively speaking)

for dedicated HTPC machiness I've built in the past, I was able to get the windows install to under 700mb
 

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When all the unneeded services and drivers etc are not loaded the memory footprint is considerably smaller without giving up a ton of the functionality like with certain other tablets
 

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Yes I agree however the method remains the same for system calls & application library loading into memory. Developers have a lot of work to do to optimize for these processors.

This is diverging from the OP's intent but I do agree with the article that there seems to be a missed boat by MS$ to catch-up in the tablet market. 2011 will certainly see a number of tablets released & I hear that iPad2 has also been talked about. Hit em' while there down...
 

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It looks like another 'too late to the table' scenario for MS. Not to mention more wasted $billions in R&D and marketing costs that must be made up by the Windows and Office divisions.
 
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