Perhaps you saw the news stories on Update Rollup 2 (code name: Emerald), the innocuously (and intentionally?) forgettable name for what most of us expected to be Windows Media Center Edition 2006. In every fourth quarter for the last three years, Microsoft has released a new version of MCE, and, as I've speculated in this column previously, I believe Microsoft fulfilled it's third-time's-the-charm model once again. MCE 2005 isn't perfect, but it's good enough to be a market success.

Only it wasn't. As of last January, Microsoft had only sold 1.4 million MCE licenses since the debut of version 1 in 2002. In contrast, Windows XP sold 46 million copies during its first 10 months.

Here at RAM, there's only one new thing we wanted in MCE 2006: HDTV from cable and satellite. And that didn't happen. (Next in line was more dependable IR functionality, and the verdict's not in on that yet.) As I predicted, without CableCARD (a feature that had been on the table for Rollup 2 but was cut), HDCP, and a slew of industry agreements spanning from Hollywood to HBO to Hauppauge (the tuner card company, not the city), there's no way Microsoft can move forward on HDTV. So Microsoft had a choice: Either do an update for 2005 this time around and give all the glory over to Vista MCE or come out with a really lame MCE 2006 that would take an even heavier beating in the market. Obviously, Microsoft went for Door #1.

In addition to the usual "enhancing stability and performance" business, Update Rollup 2 adds some interesting new features:

1. The Xbox 360 will be an MCE Extender out of the box. This is sort of a good news/bad news deal. It's good news because it gets people more into using their PCs as media devices, meaning they'll need faster parts and higher storage capacities. It's bad news in that the channel is not a great outlet for the 360, and I wouldn't count on moving many Linksys Extenders once the 360 arrives.

2. MCE now supports two ATSC tuner cards, also known as over-the-air digital TV. This means users can record one OTA HD show while watching another. This assumes you can find a user who has a clue that HD exists via OTA broadcasts and cares.

3. DVB-T radio support. This is a big deal in Europe. I don't even know if DVB-T radio exists in the States. This ties into another Update Rollup 2 "enhancement," which is broader geographic support. Strangely, the first thing Microsoft mentioned when it briefed me on Rollup 2 was support for more countries. Personally, that would have been last on my list, but maybe that's because I'm just another artery-clogged, prime time-watchin', ethnocentric American.

4. DVD writing is beefier thanks to licensed technology from Sonic Solutions. You can now take HDTV (OTA) recordings and burn them to DVD...at standard definition. Excuse my lack of enthusiasm here. More impressive are support for double-layer DVD media and the ability to initiate DVD recordings from an Extender. Wouldn't it be easier to let Extenders incorporate DVD burners?

5. One of the coolest features in Emerald is Away Mode. This is essentially an instant-on/off function that leaves the PC running but suspends all video and audio output, thus leaving the machine free to record shows, install updates, and so on. The catch is that the hardware necessary to implement Away Mode isn't on the market yet.

Another thing to come from the Emerald briefing is that Microsoft has now sold 4 million total MCE licenses. Apparently, the strategy of selling MCE boxes sans TV tuner is working, although there may well be a difference between selling 2.6 million licenses into distribution so far in 2005 and having 2.6 million new end-user activations. But this sudden blast-off in sales seemed odd to me, so I hopped on Newegg.com and did a little searching.

It turns out that XP Home SP2 OEM sells for $91.95. XP Pro SP2 OEM goes for $141.95. And XP Media Center Edition 2005 OEM goes for $129.95. That's right. MCE, which is XP Pro SP2 with a 10-foot UI strapped on the side, is now cheaper than XP Pro itself. It's a brilliant, synergistic move for Microsoft. The TV stuff is what confuses many consumers. So strip that out, price MCE to be the de facto Windows desktop OS, and get legions of users addicted to managing their multimedia with a remote control. It's a perfect set-up for the Xbox 360 and leverages one of the few key function advantages Microsoft has over Mac OS. And it's a great value-add from a channel perspective at a time when most tier-one boxes are still shipping with regular XP.

I'm not excited about Update Rollup 2. I am excited about MCE finally going mainstream and getting the adoption it deserves. It's about time.

Consumer broadband deployment is a battle between DSL and cable, right? Well, get ready for a third combatant: broadband over powerline, or BPL. For years, we've dabbled with home networking over power lines, which are far more ubiquitous throughout the home than phone or coax cabling, but not until the recent movements of the HomePlug Powerline Alliance (www.homeplug.com) did we have the 10 Mbps data rates necessary for a respectable LAN. (HomePlug AV bumps this up to 100 Mbps.) But even before HomePlug finds its legs, the Alliance is forging ahead with the BPL effort, hoping to unite ISPs, utilities, and anybody else interested to deliver broadband via the power utilities.

I'm not here to get into the technicalities of BPL. Suffice it to say that BPL can deliver asymetric modem speeds from 256 Kbps to 2.7 Mbps. Ham radio operators hate it because BPL often emits interference in their frequency range. After all, it's not like anyone designed power lines to carry high-speed data traffic, so there are bound to be some side-effects. However, the FCC gave BPL the green light in 2004, and commercial deployment is hitting the streets in pockets across America, including Cincinnati and Washington, D.C.

Personally, I use Comcast, but whether I get my high-speed service through cable, phone, powerline, wireless, smoke signal—whatever—doesn't matter much to me. Effective customer service matters most, and whether power companies can deliver the same or better service as their existing competitors remains to be seen. I think the real significance in BPL isn't so much in adding a third competitor to the mix as what role Microsoft can play in the emergence of a new broadband superpower.

Continuing our discussion about HDTV from above, consider that the number one reason MCE doesn't have cable- or satellite-based HDTV support yet is that the carriers refuse to release the decryption codes buried in their set-top boxes. The digital channels and the shows on them are their premium content, after all, and if everyone could record HBO and all the HD channels at will on their PCs, then the value of the digital channels would be greatly diminished. Or so the carriers believe. One could make the same argument for all channels, and I suspect the slow adoption of media center solutions up to 2005 is testament to the fallacy of that line of thinking. If I really wanted The Sopranos on my hard drive, I'd rent and rip it through Netflix.

Right now, the cable and satellite companies call the shots, and the PC industry can only sit on its hands and wait. But what if BPL came along, desperate for quick market share and in need of partners willing to supply things such as, oh, MSN content or IPTV video and TV capabilities. (IPTV was developed by Microsoft.) In return, what if the powerline providers agreed to make their services more MCE-friendly? It's a win-win on both sides, and Microsoft is putting the pieces into place now by making sure as many people are media center-ready as possible.

BPL by itself isn't much of a channel story. A pipeline is a pipeline. BPL as an MCE opportunity is a lot more compelling because it would significantly broaden the content available to media center PC buyers.

If I pull my head out of the living room experience and put it back in my wallet, it's clear that Microsoft is not always the smartest play. There are at least six PCs in use around my house not counting the Pentium III-based Xbox, and only two really need to run Windows (XP Pro on my work system and MCE 2005 on the home theater box). My wife and I both have notebooks, there's an ancient HP Evo that sees occasional use in the garage, and I have a media encoder/transcoder machine in my office the Evo runs Xandros Linux because the hardware simply buckled under XP, and the truth is that the other two notebooks and media box could just as easily run Linux.

When I take my notebook on the road, I do three things: Web access, word processing, and spreadsheets. Between Opera or Firefox and Open Office (which is fully MS Office-compatible), I'm covered. If I need to do a quick photo editing job, GIMP is a great alternative to Photoshop. For CD ripping, there's G-Rip, GnuCash serves as a decent alternative to Quicken, and there are enough IM, game, and utility apps on Linux—all for free—to satisfy just about any consumer.

But this isn't about me. Schools, government agencies, and thousands upon thousands of businesses all buy low-end PCs designed to do little more than run Web and basic productivity apps. Perhaps this is why Linux PC market growth continues to climb 30% annually. This year, total shipments are expected to hit about 7.5 million, according to IDC, with sales expected to hit $10 billion by 2008.

When it comes to selling a no-brains-required Linux distribution, I still maintain that Linspire is the best, most channel-friendly option on the market. Available for $50 via direct download and substantially less to reseller partners, Linspire Five-0 looks and feels so much like Windows that there is virtually no learning curve provided you stay on the regular usage path. The pothole most Linux newbies stumble on is application installation, and Linspire remedies this with its Click-N-Run software clearinghouse, which makes InstallShield look like a Ph.D. project. So long as you stick to the titles contained in the CNR—and there are currently over 2,000 free titles plus plenty more you can buy—the installation process is effortless. If you want a title not in the CNR, then you need to master enough command prompt Linux to see your way through, and that's simply not my bag. Linspire comes with a two-week CNR membership out of the box, the standard service is $20/year, and the Gold Service package, which includes OS and application update notifications among other things, is $50/year. When I evaluated Five-0 after its release, I downloaded for free in and an hour the equivalent of what would have cost me about $1,500 to buy under Windows.

I'm not convinced that "Linux" is a friendly word among desktop purchasers yet. There's still too much stigma from the server and geek worlds. Perhaps "Windows alternative" might be more acceptable. But I have little doubt that a Linspire box planted in front of an IT purchaser looking to bring in a fleet of low-end boxes would be persuasive. Many resellers are discovering this with school districts and other institutions. Linspire is a differentiator and ASP dropper, and you don't lose anything in Windows compatibility, including accessibility over the network. Check out www.linspire.com and at least sign up in the Partners program to see what the OS can offer your clients.

I'm not one of the slavering masses of iTunes lemmings. As I sat reading the announcement earlier this month of the iTunes ROKR phone from Motorola, I got an IM from a friend who belongs to the Cult of Apple, and she proceeded to drool all over my screen about how much she wanted a ROKR. I started an IM webcam connection with her.

"Listen," I said, holding my Audiovox SMT5600 phone up to the camera. I punched a few buttons and out came the sound of my eight-month-old laughing and saying ah-da-da-da. "That's my ringer. Now watch." I hit another few buttons and up on the screen came a full-motion episode of Thomas the Train (for my toddler). "And now listen again." A few buttons later came a track from Jason Mraz's new album I'd downloaded with the Napster To Go service. "Guess how much I paid for download charges on any of this. No guesses? ZERO."

My friend said nothing, waiting for the inevitable.

"I've been able to do all this for a year," I said, lying slightly because Napster To Go isn't quite that old, not that a Mac chick like her would know better. "Go have a happy-happy group hug with your hipster cult drones and call me back when you guys realize how much your iTunes platform still sucks."

"No, you suck," she retorted. And then we went back to being friends.

As with MCE, I've been a fan of the Windows Mobile platform since the moment I first set hands on a Pocket PC. I've tried various incarnations of Palm and Symbian, and I keep realizing that nothing comes remotely close to Windows Mobile, and that extends into the corporate world, too, when you need to integrate with Exchange Server and such.

Some have postulated that cell phones are the next PC. They deliver communication, Internet access, entertainment, and much more. With Bluetooth today and speech recognition tomorrow, they can even work as document creation tools in a pinch. Everybody carries one, and, thanks to Intel's cellular service referral program for resellers, you can make Windows Mobile devices a part of your offerings and get compensated decently for it.

In some cases, Linspire and other Linux distros offer better value than Windows. Apache can best Microsoft in the Web server space. Sun and Corel each look more attractive than MS Office 2003 when the light is just right. SnapStream, Meedio, Sage, and all that crew can, in their own ways, out-PVR Windows MCE. But to individuals and organizations who work on the run, Windows Mobile is peerless, and it's the apex that crowns all those other Microsoft platforms that support it from below.

Again, look at the video iPod. What a joke. I can pay $2 to download last night's Desperate Housewives from iTunes, or with a few clicks I can instruct MCE to record the entire series, save it to the My TV folder, and automatically transcode and sync it to my Windows Mobile phone...for free. The PlaysForSure platform is bounds beyond iTunes save in one thing: marketing. With partners like ABC and Disney, Apple is running circles around Microsoft in visibility with an inferior product.

But this is starting to change. Heading into the holidays, you may notice that many PlaysForSure devices (not cell phones, though) have dropped the standard install disc and now have an Easy Start CD. This not only universalizes the installation and setup process but also offers tutorials on ripping, syncing, and using music stores. A big push is being put on at retail to increase the visibility and appeal of PlaysForSure devices. Thus far, Microsoft has been content to sit in the background and let services such as Napster develop promotions based around big name celebrities, but there's only so much Napster can do with its limited resources. Now, Microsoft needs to bring MTV, ESPN, the major movie studios, and other high-profile content owners to the party and make PlaysForSure the must-have platform of 2006, not iTunes.

There are plenty of alternatives to Microsoft on the market. But none of them is inherently better than what Microsoft offers, and it's obvious that none of them is better for the channel.