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So you’re familiar with the ultra-cheap laptop that looks like Shrek; OLPC’s XO. Soon, the crew in that line of work may be getting a break, courtesy of the desperate Microsoft.

“I’m prettier than Linux!” frantically screams Microsoft. For ultra-low cost computer manufacturers, Windows XP Home Edition will be offered at a big, fat discount. Think $26-$32.

Of course, there are limitations. Microsoft has to be careful not to tamper with the mainstream PC market, which is running Vista. To benefit from Microsoft’s attempt to beat out Linux, firms must be producing super cheap PC’s with 10.2 inch screens, HD capacities at 80GB or under, a max of 1GB RAM, 1.0GHz single-core processors, and no touch-screens.

However, it would seem that taking the bait on this hurts the overall cause– to create ultra-cheap computers. Adding something like Windows XP would jack up the price. After all, Microsoft’s competitor is…free. [ComputerworldUK]

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