Microsoft:

Today Microsoft announced the worldwide extension of the availability of Windows XP Home for an emerging, new class of mobile personal computers commonly known as ultra-low-cost PCs, or ULCPCs. Windows XP Home for ULCPCs will be available until the later of June 30, 2010, or one year after general availability of the next version of Windows.

That's worded poorly, so let's be clear about what it means: Windows XP Home Edition will be available on ULCPCs through either June 30, 2010 or until one year after Windows 7 ships, whichever comes last. (My bet is that Windows 7 will ship in 2010, so "one year after that" will be the later of the two dates.)

Microsoft has heard from partners and customers that they want Windows broadly available for this new class of devices, because they want the familiarity, compatibility and support only available on the Windows platform.  Extending the availability of Windows XP Home for this category reflects Microsoft’s ongoing commitment to deliver the right version of Windows for new device categories as they emerge.

ULCPCs are a new and growing class of mobile computers designed for first-time PC buyers and customers interested in complementing their primary Windows-based PCs with companion devices with limited hardware capabilities.  These machines vary, but they typically have smaller screen sizes and lower-powered processors than more expensive mobile PCs. While originally intended for students and other first-time PC customers in emerging markets, we’re now seeing interest in these affordable devices in developed countries as well.

There is no plan to extend sales of other editions of Windows XP beyond June 30, 2008 ... mainstream technical support (of XP) will continue to be available until April 2009 and extended support will continue until April 2014.

We are very proud of the progress that we have made with Windows Vista over the last sixteen months.  Since its launch, Windows Vista has become the fastest-selling operating system in Microsoft history.

Related: Unlimited Potential (Microsoft's site for computing in emerging markets)