Calling Windows XP "a major release, the most important since Windows 95," Microsoft chairman Bill Gates on Tuesday gave the first public preview of the successor to both Windows 2000 and Windows Millenium (Me). The venue, a sound stage in a high-tech music museum here, was fitting for the demonstrations, which focused on the video, music, and image manipulation functions of Windows XP. However, the multimedia features are essentially upgrades of Microsoft's existing Music Player, Movie Maker, and digital imaging software. Microsoft has said the other key differences between Windows XP and its predecessors will be improved stability and speed. The new operating system is based on the Windows NT/2000 kernel, and is the first of Microsoft's consumer operating systems to use that more robust core. Gates and Jim Allchin, group vice president of the platforms division, emphasized the multimedia functions to good effect on the huge screens and premium sound system in the Experience Music Project, a hands-on music museum and theater that was the brainchild of Microsoft co-founder Paul Allen. They highlighted only one new non-multimedia feature: the remote assistance function, which lets one user take control of another person's PC, with permission. They also showed a cleaner, more customizable desktop that supports multiple log-ons, so several family members can share a PC without having to share application configurations and desktop layouts. Many of the common Window menus are more heavily nested, so you can drill down to less frequently used programs or files. The startup menu and control panel are streamlined. Still, much of what Microsoft demonstrated at the introduction it already has discussed in its descriptions of the Windows upgrade previously known as Whistler. The Microsoft executives hinted that more new features are in the works, but gave no specifics. Under questioning, they also acknowledged that many of the functions demonstrated can already be done with earlier versions of the audio and video programs. But they maintain that the new tools simplify such operations. With trademark evangelical fervor, Gates called the software upgrade "a lifestyle upgrade" as well. "There's other experiences we haven't unveiled today that will make it compelling for a small-business user," Allchin said. Gates said expert users will want to upgrade for the greater reliability. But the event was strictly an introduction. The demonstration was done using pre-Beta 2 versions of the operating system, and Gates said Beta 2 will ship to testers this quarter. They revealed no pricing information and were vague about release dates, although one participating vendor partner said the software will be available in the fall. "Pricing will be similar to what we've done in the past, but I'm not being specific," Gates said. Neither were they specific about system requirements. "You'll get a much better experience the more you add in terms of system and display," Allchin said. Early beta-test reports have indicated you'll want at least a Windows 2000-level system, which is a 300MHz Intel Pentium II system with 128MB of memory. But Windows XP can apparently run in a mode of its predecessors, all the way back to Windows 95, if required for older applications. Gates and Allchin also emphasized the easy connectivity of myriad devices to Windows XP. During the demonstration they transferred images from a digital camera to a PC, from video to a Compaq iPaq Pocket PC, and from audio output to an Iomega HipZip. They also touted Web connectivity, but gave little indication of how Windows XP fits into Microsoft's .Net strategy, which calls for seamless Web interaction. Gates did, however, refer to Windows XP as an "always-on" system that will interconnect numerous digital devices in the home and office. The remote control function is offered as a handy tool for troubleshooting and tech support, as well as for dial-up access to an office PC from the home. "Windows XP is the system I've always wanted to build. It's the system my mom deserves," Allchin gushed, describing how handy the remote assistance function will be when he needs to troubleshoot for his mother. Microsoft has said the "XP" stands for "experienced," although it also could refer to "XML Protocol." Gates called XML "the new standard for how data is exchanged" and a key part of all Microsoft projects. The goal of Windows XP, Gates says, is "to take the experiences people have today and make them better. It is fair to say there are things about Windows people get frustrated about." As examples, he points to niceties such as an auto-compression function for sending large multimedia attachments by email, and a printing wizard for easy setup. The operating system provides native support for CD-recordable devices, so you can easily back up files or move them to another device. They also touted the WMA file format, used by the new Windows Media Player 8, which Allchin says saves music files in half the space of MP3s. He also claims the player copies files "700 per cent faster" but was not specific about the hardware requirements; the demo system was a 700MHz notebook. Pledges to bundle Windows XP on both home and business systems came from videotaped representatives of Hewlett-Packard and Compaq. Windows XP is perfectly paired with Intel's top-line Pentium 4, Intel Chief Executive Craig Barrett declared on video. And representatives of consumer electronics retailers Best Buy and Circuit City enthused about promoting Windows XP systems coupled with peripheral consumer devices. Even EBay chief Meg Whitman is endorsing the new operating system; her videotaped testimonial hinted that Windows XP will enable new multimedia applications at the auction site. "Today, people today only use their PC for one thing. We're saying it will be easy for you to move to music and video and other things," Gates said. And, apparently, for new functions still unrevealed.