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Microsoft plans to publish formal design guidelines early next year that will assist manufacturers in designing flash memory based machines to run XP.

At the same time it will begin limited field trials of Windows XP on the XO. If successful then XO laptops running XP could be available as early as the second half of 2008.

James Utzschneider, general manager of marketing and communications for Microsoft's unlimited potential group, is meeting with the OLPC team next week to discuss the state of play with the Windows port.

He rejects reports that the operating system is already running on the device, but says the level of interest from some governments' merited a progress update.

Utzschneider explains that the project falls outside the company's normal remit.

"We are using an approach that is a little unusual for Microsoft in that we are managing the entire process of adapting and testing an existing version of Windows for a new PC," he says in a blog post. "Usually the hardware vendor does

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this."

Despite allocating more than 40 engineers, Utzschneider does not think that a production-quality release will be ready before mid-2008.

"Because of this, we have not announced formal plans to support the XO yet, and we will not do so until after we start getting feedback from our first limited field trials starting in January," he writes. "We do not want to set expectations we subsequently cannot meet."

The specific issues that need to be addressed include the use of flash memory rather than a traditional hard drive. The XO only comes with 1GB of flash, and Microsoft needs 2GB just to run Windows and Office. It has asked the OLPC team to add an SD card slot than can provide the additional storage.

Microsoft's engineers also need to write drivers for the XO's wireless networking, camera, graphics processor and audio system, as well as the various user input devices; game pad, writing pad, touch pad, directional pad, and mouse pad. They also hope to support the XO's mesh network design, its power-saving "e-book" mode, and its capability of high screen visibility in full daylight.

Utzschneider says that supporting the OLPC project is one way that Microsoft can fulfil its aim of transforming education through technology.

"In fact, there is a good alignment between what OLPC is trying to do and what we are trying to do. And frankly, nothing would please us more than seeing hundreds of thousands of these XO computers that are now starting to be deployed all running Windows."

Others have suggested that Microsoft is more interested in deterring other low-cost laptop manufacturers from plumping for Linux, as both OLPC and Asus have done.