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NEW YORK -- A lot is riding on Windows XP, the much anticipated operating system unveiled by Bill Gates in New York Thursday morning. Touted in dozens of events around the country, XP carries with it the hopes of both Microsoft and a beleaguered PC industry for a way out of the high tech recession.

Now shipping in several configurations and preloaded on an estimated 50 million PCs introduced by hopeful vendors, Windows XP offers better stability and many consumer-friendly features. The OS also promotes Microsoft's copious online services, key to its nascent .Net strategy of Web applications to be delivered to PCs, cell phones, digital organizers, and other devices.

It is an open question whether these features will be compelling enough to convince the public that XP is worth the inevitable upgrade hassles, but Microsoft is pulling out the stops and spending $200 million to promote the new OS.

Continuing a tradition of flashy sendoffs for the company's operating systems, Gates was joined onstage Thursday by New York City's Mayor Giuliani, who expressed gratitude that the event was held in NY. Regis Philbin also joined Gates on stage for an XP round of "Who Wants to Be a Millionaire." Philbin joked: "If anyone needs a million dollars, it's you." Sting performed a concert preceding the launch.

What the People Think

Many of the attendees of the New York event, which drew a mix that ranged from consumers to information technology managers, seemed to like what they heard. "I'm absolutely upgrading," said New Jersey resident Jeff Mintz. Consumers and businesses unanimously put system reliability at the top of their lists of reasons why they planned to upgrade. Other reasons ranged from "practical" to a "gut feeling."

"XP has got a lot of new car smell. I just want it," Mintz said.

While similar sentiments were heard at events and stores around the country, many people said that they were going to take a wait-and-see approach before migrating to Windows XP.

"How many Microsoft products are fully baked at introduction?" questioned William Bragg, an instructor at ITT Technical Institute. Interviewed at a San Francisco launch event, Moore said he's been running a beta of the operating system on a "mule" in his garage, but he doesn't recommend anybody install it during the first 90 days.

"In six months it will be a much better product," he said.

Rod Thole, an independent IT consultant, is also leery of the first versions of XP.

"I'd only recommend it at this time if you're buying a new system," he said. His biggest concern: driver issues.

"The rest of the industry will take a few months to catch up," he said. "That's why I would wait."

Hardware an Issue

The operating system's hardware requirements also give pause to some potential users.

Mark Mastrounni, a network engineer who works for a Baltimore-area medical management company with 60 desktop PCs, said his firm would have to replace 80 percent of its hardware to meet XP's system requirements.

(XP requires a 233-MHz CPU, 64MB of RAM, and 1.5GB of open hard disk space.)

Nevertheless, Mastrounni said the OS's remote-control desktop feature would be the most helpful for him as an administrator.

"Now, if there's a problem, I have to go out to the machine, or we'd have to install a third-party product for remote access, and that's just not cost effective," he said.

The cost of replacing computers is an issue, he said, but features like remote access could make it worthwhile.

"That's tough to look at," Mastrounni said. "But so many of our machines are aging machines, we're starting to have hardware problems--so it's going to happen anyway."

And with computer prices lower than ever, he said, "now's the time."

Beleaguered PC vendors are hoping that millions of others will come to the same conclusion.

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