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Until now, Microsoft has only licensed Vista Ultimate and Business editions for use in virtual machines, leading to allegations that the company was attempting to cash-in on virtual systems.

Last summer, the company was poised to allow the Home Basic and Premium versions to be used for virtualisation, but mysteriously had a last-minute change of heart.

Now the company has once again performed an about turn, saying that "Windows Vista Home Basic and Windows Vista Home Premium are now licensed for use in a virtual machine environment," as part of a new virtualisation drive.

"Very few customers

"Our approach is not only one of the most comprehensive in the market today, but we believe it is also one of the most economical. This combination brings a big strategic advantage and cost savings to customers."

Spending power

Aside from its relaxation of the Vista licensing terms, Microsoft has also bought Calista Technologies, whose patented technology improves the 3D graphics performance of remote, virtual desktops.

Microsoft claims the acquisition will "enable remote workers to receive a full-fidelity Windows desktop experience without the need for high-end desktop hardware, while enabling software vendors to deliver additional capabilities." The financial terms of the deal haven't been revealed.

The moves come ahead of the launch of Hyper-V, Microsoft's first stab at virtualisation software, which will launch with Windows Server 2008 at the end of February.

See the latest issue of PC Pro for an in-depth guide to triple-booting Vista, XP and Mac OS X