My experience was exactly the same, but with Vista I'm actually using the Aero theme. One reason is that using the 3D hardware for the windows eliminates repainting when they're covered/uncovered, and having become used to this, I now find the old behaviour (in XP and older, as well as the X11-based systems I've used) irritating. OS X had this feature first, but I didn't like it for other reasons, so never used it enough to become used to this.
Apart from using the 3D hardware, I don't know if OS X implements an architecture similar to WDDM, with virtualisation of the video memory and OS scheduling of the GPU. Since at least the latter requires a specific hardware implementation for DirectX 10, I'd be surprised if OS X does anything like it, since the necessary hardware had not previously existed.
You're free to grant all of these rights to users of your software by releasing it into the public domain, without any need at all for the 'Free Software' movement. Indeed, people and institutions were releasing software into the public domain and under minimally restrictive licences well before Richard Stallman started his 'Free Software' movement.
'Free Software' is about adding restrictions on distribution, to support a particular ideology; it's got nothing to do with freedom at all.
I don't agree with that. If Ford, for example, added patented technology to its cars to allow road use to be accurately metered, and the state entered into an agreement to allow drivers of Fords to pay for only their actual road use, I'd consider that progress. Would it discriminate against drivers of other cars? Yes. However, it would also improve economic efficiency and reward Ford for developing technology that improves social welfare, and which would eventually be available to everyone.
BBC programming isn't going to be available exclusively to Windows users, the BBC are just taking advantage of a new distribution channel made possible by Microsoft's DRM technology. Since Microsoft developed technology that allows the BBC to digitally distribute content that it would otherwise be legally unable to distribute digitally, thereby enhancing social welfare, it's perfectly proper to reward them.
WMV suits the majority of users but it's troubling when a state funded organisation requires users to purchase a product available from just one company in order to use their services. It's even more troubling when the product in question is sold by Microsoft.
Maybe they should make the contract conditional on Microsoft offering the relevant codecs for any OS with a user base over a certain threshold. I think Microsoft could easily offer its codecs for Intel Macs, for example, and Mac OS is probably the only other platform with a large enough user base to be important. I don't know if implementing the DRM on Mac OS would be a problem or not, though.
An overwhelming number of people can walk but state libraries still install wheelchair ramps to take care of the minority that can't. That's what a state organisation should doing.
Yes, but the point is they can't walk, not that they don't want to walk. If someone doesn't want to use Windows, it's their own choice.
I suppose the primary reason I disagree with this is that I haven't the time, expertise or resources to determine what all the people and firms I interact with are doing with any information I give to them, and I'd argue neither have most people. To me, privacy is no different to any other fundamental right: if I buy a plot of land, for example, I don't expect to have to enforce my own property rights, it's something I expect the state to do. It's the same with protecting my rights to free speech, privacy, et al.
I can certainly see the problem with the state placing onerous burdens on the private sector, and care should be taken to ensure this doesn't happen, particularly where there's scope for abuse. If, for example, privacy concerns over Google were exposed as an attempt by its competitors to abuse the legal system because they're unable to compete on merit, I'd object to that. However, a lot of people have real concerns over their privacy rights being violated by firms like Google, and as far as I can tell, that's the basis of the EU's actions here. Moreover, the requirements being placed on these firms seem quite reasonable to me.
Google is far less evil than your government in this regard.
The management of Google aren't elected, unlike my government. There are many things that are best left to the private sector, for example I don't like seeing the state trying to manipulate competition. However, when it comes to protecting citizens' rights, including privacy, that's one of the most important things the state is there for. I trust the state to protect my privacy rights far more than any private firm, particularly an advertising firm (and a foreign one at that).
I am no expert on US law, but in Brandenburg v Ohio, the US Supreme Court stated:
Freedoms of speech and press do not permit a State to forbid advocacy of the use of force or of law violation except where such advocacy is directed to inciting or producing imminent lawless action and is likely to incite or produce such action.
It certainly looks to me like this supports the view that incitement to illegal activity is itself illegal under US law. There is a requirement of imminence, so posting on a website probably wouldn't count, but if you're standing in front of a crowd, inciting them to kill someone, or commit some other illegal act, this opinion suggests to me that you could be prosecuted for your speech.
With respect to Europe, there are vast differences in free speech rights from one country to the next, with Germany for example being one of the more restrictive countries, for historical reasons. You can't really talk about 'Europe' as a single entity here, even if there are some common provisions, based on the ECHR, EU treaties and so on.
'Free Software' has nothing to do with freedom, and never has done. It's about promoting a particular software development and distribution ideology, which its supporters prefer.
The pragmatic wing, i.e. the 'Open Source' movement base their support for open source development on the belief that it will produce a higher quality product, at least in the long run, whereas for the 'Free Software' movement it's a matter of ideology. Richard Stallman and his followers prefer open source software that matches their ideology, even if it's technically inferior to the alternatives.
Stallman and the 'Free Software' movement are of course entitled to their views, but all the rhetoric about freedom is just a propaganda technique, like the American Cold War practice of treating capitalism and democracy as synonyms, or the Marxist practice of referring to totalitarian socialist states as 'democratic people's republics'.
At the end of the day, the FOSS advocates make some good (and also some hopelessly poor) arguments, and it's quite interesting to watch the development of the various software camps (proprietary, copyleft, fully open, etc.). The references to 'freedom', however, are just rhetoric, and shouldn't be taken seriously.
WMV can be viewed on essentially any brand of PC as well, provided Windows is installed. For the overwhelming majority of users, the choice of PC manufacturer, not OS, is the one that matters.
Theoretically that might be a better way to go about it, but in practice the resources required to develop and support a viable format, particularly one including DRM, would be much higher than the costs of simply licensing a format from Microsoft (or Apple, et al.). The result would almost certainly be of inferior quality as well: look at the complaints in this article about the software the BBC have developed, and they haven't even had to expend resources on trying to implement a codec or DRM.
At the end of the day, the BBC ought to be developing a solution that provides the best value for money for the British public. That most likely requires leaving things like codec development to people who actually know how to do it. The overwhelming bulk of British computer users can play WMV, and will get a more satisfactory result from it than from most (if not all) of the alternatives.
No, you cannot disable vista's indexing. And why should you ?
Where does this idea come from? The Windows Search service is just an ordinary Windows service (daemon in Unix terms), and there is nothing stopping a user with administrator privileges turning it off or disabling it entirely.
There's no deep mystery about it: the Linux user base is simply too small to be of interest to an advertising firm like Google.
Google's objective is not to attack Microsoft, it's to deliver targeted advertising to PC users. Google Desktop is just another tool used to profile and mine the data of users. To the extent that Vista's search feature makes Google Desktop redundant, it reduces Google's ability to profile users and mine their data, which in turn makes it harder to target advertising at them.
Just like IE, where after many years MS reluctantly added features, they have finally added search capability to the OS, but in standard form they cut everyone else out. Is the MS solution superior? Probably. But couldn't they have provided the solution years ago when customers needed it, rather than now simply as a method to cut out those that provided past service?
Windows has had searching for years: a content indexing service was released in 1996, and has been standard since Windows 2000. The problem is there was never a good client interface to it. Microsoft were also discussing improved indexing/searching functionality for Longhorn/Vista, initially based on WinFS, long before Google Desktop existed. Microsoft can certainly be faulted for taking too long to make thier indexing/searching facility easy to use, but it's an idea they were discussing long before Google (or Apple), and had even implemented first, albeit in a clumsy and difficult-to-use way.
The world of antitrust is reminiscent of Alice's Wonderland: everything seemingly is, yet apparently isn't, simultaneously. It is a world in which competition is lauded as the basic axiom and guiding principle, yet "too much" competition is condemned as "cutthroat." It is a world in which actions designed to limit competition are branded as criminal when taken by businessmen, yet praised as "enlightened" when initiated by the government. It is a world in which the law is so vague that businessmen have no way of knowing whether specific actions will be declared illegal until they hear the judge's verdict -- after the fact.
Oh yes, I certainly didn't mean to imply that monopolies are necessarily socially optimal. The two principal objections to monopolies involve efficiency and fairness. Price discrimination by a monopoly is one way to potentially improve efficiency, but it actually worsens fairness, which is already worse in a monopoly market than in a competitive one.
The impact of monopolies or near monopolies on innovation is also an interesting issue, particularly in light of the large number of dominant firms in IT industries, and a more ambiguous one. There are strong arguments on both sides, and it's not as simple as something like fairness, where monopolies are unambiguously bad.
Perfect price discrimination is a theoretical concept only especially in consumer markets. It is impossible to implement. How are would you assess every consumer's willingness to pay? Telepaths? If you ask me, I'll say $3 which is below marginal cost of production for software.
Well, I'm pleased you know this, but if you think I was suggesting perfect price discrimination exists in practice, and certainly in the software market, I'm afraid this is a product of your own imagination, and not anything I wrote. The use of such a straw man may be emotionally satisfying, but it doesn't do anything to support your argument.
The primary value in understanding theoretical concepts like perfect price discrimination, or even perfect competition, is that the imperfect forms, which do exist in practice, often exhibit many of the same characteristics, but to a more limited degree. Imperfect price discrimination, for example, can improve the efficiency of a monopoly. Where a natural monopoly exists, therefore, and the objective is utility maximisation, price discrimination may very well be one way of improving the outcome.
Considering that it's not going to possible raise OEM Windows pricing on low end PCs without risking new competition, I'll stick with $40-50 for OEMs. The threat of low-end PC makers using another OS which would happen if MS tried to charge them $200 for the OS has a huge impact of future revenue since it would risk breaking the Windows stranglehold on the OS market
I see, so do you imagine $40-50 is the price currently charged to OEMs for Vista Home Basic? In other words, are you suggesting Microsoft would, if forced to use a single price, charge the price it currently does for Home Basic? Do you believe this would also apply in the retail case? If so, I'm afraid your view is not terribly realistic.
Looking at the empirical data, the retail price of Windows 95 at its release in 1995 was US$209. This is equivalent to roughly $285 in 2007 dollars, which is 40% higher than the price of Vista Home Basic, and indeed 20% higher than the price of Vista Home Premium. Retail buyers of Windows, then, certainly appear to be benefitting from Microsoft's segmentation strategy (as I pointed out previously, it isn't quite price discrimination, because the different versions actually have different feature sets).
This is complete garbage when it comes Windows. If there are no competitive threats and Windows monopoly were guaranteed, the only reason to innovate would be to raise consumer's willingness to pay which is not going to happen. Consumers are not willing to pay more for Vista than they were for XP evidenced by Vista's lack luster sales. A small percentage of the market might pay for Ultimate but most people don't care. If MS could get rid of the competition once and for all, their best financial would be to fire all the developers, and move term licensing so would everyone would have to keep paying every year and MS would not have to spend money on developing upgrades.
Oh dear. Are you actually suggesting that if Microsoft sacked all of its developers, it would be able to continue to take advantage of new hardware, and to offer the features demanded by applications developers? I'm afraid that's rather a silly view.
The objective of a monopolist is to maximise profit, not minimise costs. In the case of Windows, the key to maximising profit is to maximise sales of PCs bundled with Windows. Microsoft therefore has a strong incentive to develop features that take advantage of the newest hardware, in order to drive sales of that hardware, and hence of Windows. It also has a strong incentive to avoid leaving any technological or price gaps which could be targeted by a new entrant to the market.
To take your silly example of Microsoft sacking all of its developers and then charging periodic fees, if Microsoft management were actually mad enough to do this, it would in the first
What the hell are you talking about? The efficiency of perfect competition means there is no economic profit for producers and quite a bit of consumer surplus for consumers.
No, economic efficiency is not a matter of economic profit, it has to do with whether or not the value to the buyer of an additional unit of output would exceed the value of the resources used to produce it. In a monopoly with perfect price discrimination, the value to the buyer of the last unit of output is precisely equal to the value of the resources used to produce it, i.e. it is just as efficient as perfect competition.
Under a single a price there are 3 types of consumers. Those who would have paid more, and they get to keep the difference as consumer surplus which is not a dead weight loss. Those who would only pay the exact price. And finally those who find the product too expensive. Assuming the willingness to pay of the consumers not buying due to price is above marginal cost, there is a dead weight loss of foregone producer surplus. However that dead weight loss is not being avoided with Vista at relative to XP as there are no cheaper versions of Vista than XP. If there were perfect competition for operating systems, this dead weight loss would be avoided. Microsoft being to charge higher prices and reduce consumer surplus is not more efficient in any economic sense.
Try to imagine the price Microsoft would charge if there were a single edition of Vista. Consider whether or not it would be higher than the price of the Home Basic edition, and/or lower than the price of the Ultimate edition. Mind you, there are functional differences between the different editions of Vista, so it isn't quite a matter of price discrimination anyway.
Your argument about monoploy investment is wrong as well. A monopoly or any other business will only invest in projects that have positive economic returns. Being a monopoly does not reduce the cost of capital to the business. All those profits are owned by shareholders. and the research is subject to the same return criteria as any another business.
It's far more complex than a simple matter of the cost of capital, and an implicit assumption of perfectly functioning capital markets.
The essence of the Schumpeterian view that monopolies are more innovative than competitive firms lies in the fact that a monopoly firm is guaranteed to reap the full value of any innovations it produces, and thus has a greater incentive to innovate. This is the same logic underlying patent and copyright laws, but a monopoly in a given market is a far stronger guarantee than a patent or copyright. There are other factors supporting this view as well, such as information asymmetry and agency problems when dealing with external sources of financing and so on.
Needless to say, there is always the opposing view from Arrow, that competitive firms are more innovative, but the question of which view best matches the empirical evidence is far from settled, and nobody with an open mind would dismiss either one out of hand as 'wrong', and certainly not in all cases.
Yes, the XP to Vista upgrade is more like the 98 to 2000 or 98 to XP upgrade than the 2000 to XP upgrade. 2000 to XP was, after all, only an upgrade from NT 5.0 to NT 5.1, and there was only about a year and a half between the releases. Upgrading from Windows 98 (Windows 4.1) to Windows 2000 or Windows XP was an entirely different matter, and at least as difficult as upgrading from XP to Vista. Vista is, after all, NT 6.0, a major version increment.
In the worst case (for Microsoft), Vista might turn out to be another Windows 2000, which many Windows 98 users avoided because of the higher resource requirements, missing drivers and so on. However, even in this case, there is no reason to expect that drivers won't eventually arrive, as they did on 2000. If NT 6.0 (Vista) doesn't fully replace 5.1, maybe 6.1 will be the one that does it. The most important difference between Windows 2000 and Windows XP was, after all, device driver and application compatibility.
As for Vista being Aero, I'd say that's true to some extent for those who are paying for a retail upgrade. To those who are buying a new PC, however, this is not necessarily the case. Vista Home Basic, which has no support for Aero, is unlikely to put higher demands on a system than XP with SP2, except perhaps for RAM, and any system bundled with Vista will obviously include device drivers for the included hardware.
In a perfectly competitive market, the price of a good and quantity produced are determined by supply and demand. As long as a firm can sell an additional unit for more than the cost of producing it, it will produce and sell that extra unit. Importantly, in a competitive market, an individual firm has no control over the market price: if it tries to push it up by restricting output, competitors will simply fill the gap, and the market price will remain unchanged, i.e. at the level where the value to the buyer of the last unit of output is the same as the value of the inputs used to produce it.
The efficiency loss from a monopolist selling a good at a single price comes from the fact that it can control the market price by restricting its level of output, which is also the market level of output. If the monopolist produces the same quantity as in a competitive market, the price will be the same. However, as the monopolist decreases output, the price it can charge for every unit of output goes up. As a result, it will restrict the quantity produced to a level that maximises profit, i.e. where the change in revenue from the last unit of output (considering the impact it has on the market price) is just equal to the cost of producing that unit. This quantity will be lower than in a competitive market, and the price will be higher.
If the monopolist can perfectly discriminate, however, it will have no incentive to restrict production. It will be able to increase production until the value to the buyer of last unit of output is equal to the value of the inputs required to produce it, which is the same quantity produced under perfect competition. In this case, the monopolist will be selling each unit of the good to each buyer for precisely the value of that unit to the buyer, and an additional unit of output would have a lower value to the buyer than the value of the resources used to produce it. In other words, the outcome in this case is efficient.
The objection to a monopoly in this case, as compared to perfect competition, is not a matter of efficiency, but rather of fairness. The level of output is the same as in a perfectly competitive market, but in a competitive market, buyers are able to buy the good for a price below its value to them (up to the last unit bought), and this gain to the buyers is called the consumer surplus. In a monopoly with perfect price discrimination, the entire consumer surplus is transferred to the producer, which is arguably unfair, but does not decrease efficiency.
Yes, and just adding a RAM stick made them immediately capable of running XP fine. A minor upgrade....
This is arguably the same for Vista, with the exception of Aero, and of potentially missing drivers, which was also certainly a problem for upgrading from 98 or even NT4 to 2000. If you upgrade the RAM, any machine that can run XP well can probably run Vista with Aero turned off. Aero is GPU-intensive, so it should be no surprise that if you want to use it on an old machine, you may have to upgrade the GPU.
Actually, price discrimination improves economic efficiency, and perfect price discrimination theoretically allows a monopoly to be as efficient as perfect competition (and remember that almost no competitive market is perfectly competitive). This means that, if you're interested in maximising overall gains from economic activity, and a market is a natural monopoly (e.g. because of network effects), then price discrimination should be encouraged.
Without perfect price discrimination there will still be some deadweight loss from a monopoly. However, competition is almost never perfect either. Moreover, if a market is a natural monopoly, then the most effective use of resources is the case of a single producer, i.e. a monopolist. Beyond the wastefulness of having multiple producers in such a market, there may be potential gains in terms of technological progress, because a monopoly can use its supernormal profit to invest in research which may be beneficial overall, but would not be viable for a firm facing competitors that would also benefit from it. Technological progress is what drives economic growth in the long run, so this is an important issue.
Mind you, Windows is not a monopoly in strict economic terms, even if its dominance is high enough to produce many of the same effects.
Do you mean the performance of the OS itself, or of Explorer? Applications tend to use a lot of core OS functions in their normal operation, but would not of course invoke Explorer. As an example, Word uses file operations quite extensively to manage temporary files, backup files and so on, so if these were slower at the OS level, one would expect Word to be slower. The I/O prioritisation scheme in Vista should, if anything, improve I/O performance.
What you're describing might be mostly an issue of upgrading one generation of the OS versus two. I'm sure there were some Windows 98/NT4 PCs that could handle Windows 2000, but not XP.
I don't know how the Vista logo thing works. My PC well exceeds the specs for the 'Vista Premium Ready' logo listed on the Microsoft website, but the logo on it says 'Vista Capable'. It runs Vista Ultimate perfectly well, and is rated highly by the Vista Experience Index. My only guess is that vendors can decide whether or not to have specific PCs validated for the 'Vista Premium Ready' logo, but not having that logo doesn't mean a PC can't run Vista with all of the graphical features perfectly well.
Well, I'm running Vista on a machine that used to run XP, and I don't notice any performance problems. A comparison by Tom's Hardware also shows that Vista performs reasonably well compared to XP (a bit slower for some tasks, a bit faster for others), except for OpenGL applications. If you use OpenGL, you'll have to download the appropriate drivers from your video card vendor.
One very important point is that Vista does have much higher RAM requirements than XP, so if you have only enough RAM for XP to run well, Vista won't run well, and you'll have to add more. RAM is cheap, so if you're going to go and buy Vista, it would be silly not to buy some extra RAM at the same time.
From a purely technical perspective, the argument is of course ridiculous. However, it actually can make sense is if they're assuming users buying Vista Ultimate/Business are more technically sophisticated, and so not as likely to be vulnerable to this sort of malware. There's also the issue of volume: Vista Ultimate and Business are more expensive, so will have lower volume, making them less attractive targets for malware authors.
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Apart from using the 3D hardware, I don't know if OS X implements an architecture similar to WDDM, with virtualisation of the video memory and OS scheduling of the GPU. Since at least the latter requires a specific hardware implementation for DirectX 10, I'd be surprised if OS X does anything like it, since the necessary hardware had not previously existed.
'Free Software' is about adding restrictions on distribution, to support a particular ideology; it's got nothing to do with freedom at all.
BBC programming isn't going to be available exclusively to Windows users, the BBC are just taking advantage of a new distribution channel made possible by Microsoft's DRM technology. Since Microsoft developed technology that allows the BBC to digitally distribute content that it would otherwise be legally unable to distribute digitally, thereby enhancing social welfare, it's perfectly proper to reward them.
I can certainly see the problem with the state placing onerous burdens on the private sector, and care should be taken to ensure this doesn't happen, particularly where there's scope for abuse. If, for example, privacy concerns over Google were exposed as an attempt by its competitors to abuse the legal system because they're unable to compete on merit, I'd object to that. However, a lot of people have real concerns over their privacy rights being violated by firms like Google, and as far as I can tell, that's the basis of the EU's actions here. Moreover, the requirements being placed on these firms seem quite reasonable to me.
With respect to Europe, there are vast differences in free speech rights from one country to the next, with Germany for example being one of the more restrictive countries, for historical reasons. You can't really talk about 'Europe' as a single entity here, even if there are some common provisions, based on the ECHR, EU treaties and so on.
The pragmatic wing, i.e. the 'Open Source' movement base their support for open source development on the belief that it will produce a higher quality product, at least in the long run, whereas for the 'Free Software' movement it's a matter of ideology. Richard Stallman and his followers prefer open source software that matches their ideology, even if it's technically inferior to the alternatives.
Stallman and the 'Free Software' movement are of course entitled to their views, but all the rhetoric about freedom is just a propaganda technique, like the American Cold War practice of treating capitalism and democracy as synonyms, or the Marxist practice of referring to totalitarian socialist states as 'democratic people's republics'.
At the end of the day, the FOSS advocates make some good (and also some hopelessly poor) arguments, and it's quite interesting to watch the development of the various software camps (proprietary, copyleft, fully open, etc.). The references to 'freedom', however, are just rhetoric, and shouldn't be taken seriously.
WMV can be viewed on essentially any brand of PC as well, provided Windows is installed. For the overwhelming majority of users, the choice of PC manufacturer, not OS, is the one that matters.
At the end of the day, the BBC ought to be developing a solution that provides the best value for money for the British public. That most likely requires leaving things like codec development to people who actually know how to do it. The overwhelming bulk of British computer users can play WMV, and will get a more satisfactory result from it than from most (if not all) of the alternatives.
Google's objective is not to attack Microsoft, it's to deliver targeted advertising to PC users. Google Desktop is just another tool used to profile and mine the data of users. To the extent that Vista's search feature makes Google Desktop redundant, it reduces Google's ability to profile users and mine their data, which in turn makes it harder to target advertising at them.
The impact of monopolies or near monopolies on innovation is also an interesting issue, particularly in light of the large number of dominant firms in IT industries, and a more ambiguous one. There are strong arguments on both sides, and it's not as simple as something like fairness, where monopolies are unambiguously bad.
Well, I'm pleased you know this, but if you think I was suggesting perfect price discrimination exists in practice, and certainly in the software market, I'm afraid this is a product of your own imagination, and not anything I wrote. The use of such a straw man may be emotionally satisfying, but it doesn't do anything to support your argument.
The primary value in understanding theoretical concepts like perfect price discrimination, or even perfect competition, is that the imperfect forms, which do exist in practice, often exhibit many of the same characteristics, but to a more limited degree. Imperfect price discrimination, for example, can improve the efficiency of a monopoly. Where a natural monopoly exists, therefore, and the objective is utility maximisation, price discrimination may very well be one way of improving the outcome.
I see, so do you imagine $40-50 is the price currently charged to OEMs for Vista Home Basic? In other words, are you suggesting Microsoft would, if forced to use a single price, charge the price it currently does for Home Basic? Do you believe this would also apply in the retail case? If so, I'm afraid your view is not terribly realistic.
Looking at the empirical data, the retail price of Windows 95 at its release in 1995 was US$209. This is equivalent to roughly $285 in 2007 dollars, which is 40% higher than the price of Vista Home Basic, and indeed 20% higher than the price of Vista Home Premium. Retail buyers of Windows, then, certainly appear to be benefitting from Microsoft's segmentation strategy (as I pointed out previously, it isn't quite price discrimination, because the different versions actually have different feature sets).
Oh dear. Are you actually suggesting that if Microsoft sacked all of its developers, it would be able to continue to take advantage of new hardware, and to offer the features demanded by applications developers? I'm afraid that's rather a silly view.
The objective of a monopolist is to maximise profit, not minimise costs. In the case of Windows, the key to maximising profit is to maximise sales of PCs bundled with Windows. Microsoft therefore has a strong incentive to develop features that take advantage of the newest hardware, in order to drive sales of that hardware, and hence of Windows. It also has a strong incentive to avoid leaving any technological or price gaps which could be targeted by a new entrant to the market.
To take your silly example of Microsoft sacking all of its developers and then charging periodic fees, if Microsoft management were actually mad enough to do this, it would in the first
The essence of the Schumpeterian view that monopolies are more innovative than competitive firms lies in the fact that a monopoly firm is guaranteed to reap the full value of any innovations it produces, and thus has a greater incentive to innovate. This is the same logic underlying patent and copyright laws, but a monopoly in a given market is a far stronger guarantee than a patent or copyright. There are other factors supporting this view as well, such as information asymmetry and agency problems when dealing with external sources of financing and so on.
Needless to say, there is always the opposing view from Arrow, that competitive firms are more innovative, but the question of which view best matches the empirical evidence is far from settled, and nobody with an open mind would dismiss either one out of hand as 'wrong', and certainly not in all cases.
In the worst case (for Microsoft), Vista might turn out to be another Windows 2000, which many Windows 98 users avoided because of the higher resource requirements, missing drivers and so on. However, even in this case, there is no reason to expect that drivers won't eventually arrive, as they did on 2000. If NT 6.0 (Vista) doesn't fully replace 5.1, maybe 6.1 will be the one that does it. The most important difference between Windows 2000 and Windows XP was, after all, device driver and application compatibility.
As for Vista being Aero, I'd say that's true to some extent for those who are paying for a retail upgrade. To those who are buying a new PC, however, this is not necessarily the case. Vista Home Basic, which has no support for Aero, is unlikely to put higher demands on a system than XP with SP2, except perhaps for RAM, and any system bundled with Vista will obviously include device drivers for the included hardware.
The efficiency loss from a monopolist selling a good at a single price comes from the fact that it can control the market price by restricting its level of output, which is also the market level of output. If the monopolist produces the same quantity as in a competitive market, the price will be the same. However, as the monopolist decreases output, the price it can charge for every unit of output goes up. As a result, it will restrict the quantity produced to a level that maximises profit, i.e. where the change in revenue from the last unit of output (considering the impact it has on the market price) is just equal to the cost of producing that unit. This quantity will be lower than in a competitive market, and the price will be higher.
If the monopolist can perfectly discriminate, however, it will have no incentive to restrict production. It will be able to increase production until the value to the buyer of last unit of output is equal to the value of the inputs required to produce it, which is the same quantity produced under perfect competition. In this case, the monopolist will be selling each unit of the good to each buyer for precisely the value of that unit to the buyer, and an additional unit of output would have a lower value to the buyer than the value of the resources used to produce it. In other words, the outcome in this case is efficient.
The objection to a monopoly in this case, as compared to perfect competition, is not a matter of efficiency, but rather of fairness. The level of output is the same as in a perfectly competitive market, but in a competitive market, buyers are able to buy the good for a price below its value to them (up to the last unit bought), and this gain to the buyers is called the consumer surplus. In a monopoly with perfect price discrimination, the entire consumer surplus is transferred to the producer, which is arguably unfair, but does not decrease efficiency.
Without perfect price discrimination there will still be some deadweight loss from a monopoly. However, competition is almost never perfect either. Moreover, if a market is a natural monopoly, then the most effective use of resources is the case of a single producer, i.e. a monopolist. Beyond the wastefulness of having multiple producers in such a market, there may be potential gains in terms of technological progress, because a monopoly can use its supernormal profit to invest in research which may be beneficial overall, but would not be viable for a firm facing competitors that would also benefit from it. Technological progress is what drives economic growth in the long run, so this is an important issue.
Mind you, Windows is not a monopoly in strict economic terms, even if its dominance is high enough to produce many of the same effects.
Do you mean the performance of the OS itself, or of Explorer? Applications tend to use a lot of core OS functions in their normal operation, but would not of course invoke Explorer. As an example, Word uses file operations quite extensively to manage temporary files, backup files and so on, so if these were slower at the OS level, one would expect Word to be slower. The I/O prioritisation scheme in Vista should, if anything, improve I/O performance.
I don't know how the Vista logo thing works. My PC well exceeds the specs for the 'Vista Premium Ready' logo listed on the Microsoft website, but the logo on it says 'Vista Capable'. It runs Vista Ultimate perfectly well, and is rated highly by the Vista Experience Index. My only guess is that vendors can decide whether or not to have specific PCs validated for the 'Vista Premium Ready' logo, but not having that logo doesn't mean a PC can't run Vista with all of the graphical features perfectly well.
One very important point is that Vista does have much higher RAM requirements than XP, so if you have only enough RAM for XP to run well, Vista won't run well, and you'll have to add more. RAM is cheap, so if you're going to go and buy Vista, it would be silly not to buy some extra RAM at the same time.
From a purely technical perspective, the argument is of course ridiculous. However, it actually can make sense is if they're assuming users buying Vista Ultimate/Business are more technically sophisticated, and so not as likely to be vulnerable to this sort of malware. There's also the issue of volume: Vista Ultimate and Business are more expensive, so will have lower volume, making them less attractive targets for malware authors.