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Microsoft is going into promotional overdrive with Windows 7, four months ahead of the operating system's official launch date.

Set to kick in as they are announced today, two offers give you "free" upgrades along with limited-time discounts - if you sign up to get Windows ahead of the October 22 launch.

The stick to Microsoft's carrot is that the majority of Windows 7 SKU prices - also due to be announced today - won't alter. So if you wait, you'll pay the same as you did for Windows Vista in most cases.

Furthermore, in European Union states, Microsoft will offer "full" copies of Window 7 without Internet Explorer 8 for the price of upgrade editions of Windows 7. Full versions are usually more expensive than upgrade editions, which are designed as a kind of money-off loyalty reward for customers upgrading from older editions of Windows.

Microsoft said it couldn't have offered a retail upgrade version of Windows 7 without IE 8 in time for the official launch on October 22. The company said earlier this month it would deliver Windows 7 in Europe minus IE 8 to satisfy with European antitrust regulators.

It's likely regulators will take a dim view of Microsoft's decision to pump out Windows 7 ahead of its final ruling on what Microsoft should do on making rivals' browsers available in Windows. And a dim view in Europe can mean financial penalties.

Microsoft's free upgrades to Windows 7 from Windows Vista will squarely target students buying PCs for the new school year this autumn. The Windows 7 Upgrade Option Program will start today and stretch to 31 January 2010, just over two months after Windows 7 becomes available.

That means free upgrades to Windows 7 Home Premium, Business, or Ultimate from the corresponding version of Windows Vista when bought from qualifying OEMs and retailers.

With the planned October 22 launch for Windows 7, Microsoft had risked losing out on the potentially lucrative back-to-school PC shopping period. Now, Microsoft will hope it can nail back-to-school plus the US Thanksgiving and Christmas shopping seasons that it badly missed with Windows Vista - and that generally prove so lucrative to Apple and PC makers.

Furthermore, from today and until July 11, customers in the US and Canada can pre-order Windows 7 Home Premium or Pro for a limited price of $49.99 and $99.99 respectively. Those in the UK, France, and Germany can pre-order between July 15 and August 14 for similar discounts. Customers in Japan get to order between now and July 5.

If you miss Microsoft's promotions, your next best bet will be to buy a full or upgrade version of Windows 7 Home Premium. Microsoft has nailed the recommended retail price for this SKU today at $119.99 and $199.99 respectively. That saves you $10 and $40 on the price for the upgrade and full editions of Windows Vista Home Premium respectively.

Microsoft's recommended pricing has a tendency to be weak when Windows is bought outside the PC channel. On Amazon, for example, Windows Vista SP 1 can be bought for $90.49 - almost $40 cheaper than the recommended price of the boxed product. That means it's unclear how well the supposed savings on the official prices will hold up.

One thing that helped weaken the price of Windows Vista was its poor reputation. Microsoft will hope Windows 7 does better, helping its official prices and estimated savings to hold up. But whichever way you slice it, Linux companies take this as evidence of Microsoft being forced to differentiate its latest operating system on price and savings - not just features. They will see it as a sign of weakness against Linux, which is free.

Meanwhile, the EU will also only see pricing reductions on Windows 7 Home Premium: The upgrade version will be €119.99 and full version €199.99, which will save you €5.01 and €29.01 compared to the upgrade and full versions of Windows Vista. ®

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