When it comes to Windows Vista pricing, there are a number of avenues to explore. First is the retail pricing: This is the cost of the various Windows Vista product editions when purchased at a retail location. I wrote about this back in August in my Windows Vista Pricing Revealed showcase. The second avenue is what Microsoft calls the Windows Anytime Upgrade. Users who purchase Windows Vista Home Basic, Home Premium, or Business will be able to upgrade to various up-level Vista product editions electronically. (Here's a screenshot of the service, which will ship inside Windows Vista). We're still waiting to hear what the Anytime Upgrade costs will look like.

The third avenue is shorter-lived than the other two but is more immediate. Because Windows Vista will not be made available to consumers until January 2007, Microsoft has long planned to offer some sort of coupon-based upgrade for people who purchase XP-based PCs during the 2006 holiday selling season. These coupons will allow people to upgrade to Windows Vista at little or no cost. The idea is that Microsoft can offset a natural drop in PC sales over the next few months by providing consumers with insurance (and assurance) that they're not getting stuck with an old Windows version.

On Tuesday, October 24, 2006, Microsoft announced its plans. Dubbed the Windows Vista Express Upgrade, this program will allow consumers who purchase new PCs preinstalled with Windows XP between October 26, 2006 and March 15, 2007 to obtain comparable Windows Vista product editions for free or a discounted price. The company is offering a similar program, the Office Technology Guarantee, for Office 2007 as well.

"Our customers can shop for a new PC with confidence this holiday season because of the Express Upgrade to Windows Vista and Office Technology Guarantee programs," says Microsoft corporate vice president Mike Sievert. "These programs ensure people will have a great experience with their Windows XP-based PCs today, and an even better one when Windows Vista and the 2007 Microsoft Office release become available."

The Windows Vista Express Upgrade program is available to PC makers and system builders, and customers who wish to take advantage of this offer will need to ensure that the PC they're buying offers the upgrade through the manufacturer. Confusingly, the offers will vary from country to country. More confusingly, PC makers can set the terms of the upgrade, so the offers will also vary from company to company. Microsoft says only that the Vista upgrade can be offered for "free or at a discounted price (shipping and handling charges may also apply)."

Here's how the upgrade will work. Microsoft will provide PC makers and system builders with upgrade discount coupons for Windows Vista that they can offer to their customers. In the US, for example, the following upgrade paths will be available:

Free upgrades (could incur nominal fee)
From this version of Windows XP... ...to this version of Windows Vista
Windows XP Media Center Edition 2005 Windows Vista Home Premium
Windows XP Professional Edition Windows Vista Business
Windows XP Tablet PC Edition 2005 Windows Vista Business
Windows XP Professional x64 Edition Windows Vista Business 64
Upgrades offered at a 50 percent discount off of the retail price
From this version of Windows XP... ...to this version of Windows Vista
Windows XP Home Edition Windows Vista Home Basic
Windows XP Home Edition Windows Vista Home Premium

Additionally, consumers who purchase new PCs with a preinstalled version of Microsoft Office 2003 may be eligible to receive upgrades to comparable Office 2007 product versions. These offers are even murkier than the Windows Vista upgrades, and will only be "made through participating computer manufacturers in qualifying locations." The cost of upgrading is typically free plus the cost of shipping. However, Microsoft notes that "customers will need to provide valid proof of purchase and cover shipping and handling costs associated with the upgrade. Customers in North America will receive a coupon with the purchase that must also be submitted."

Major PC makers such as Dell, Fujitsu, HP, Gateway, Sony, and Toshiba have all announced support for both upgrade programs and customers can expect to see the offers appear on their e-commerce Web sites in the days ahead. "Dell customers can rest easy knowing that the Windows Vista Capable PCs they buy from Dell now and during the holidays are ready to run the operating system when it becomes available," said John Medica, the senior vice president of the Dell Product Group.