Citing as a reason, its desire to urge the adoption of Windows Vista, Microsoft said that the price of its Windows Vista Ultimate, the fully-featured version of the OS, will be $319 instead of $399.

Also, those who already owns a copy of Windows XP or a version of Windows Vista will pay to upgrade to Ultimate only $219 and not $259.

Microsoft will also cut prices for upgrade versions of Vista Home Premium, its mainstream product, to $129 from $159. The price cuts will apply in 73 countries, but they could vary from one country to another.

Also, the software giant will stop selling "upgrade" versions of Vista in emerging markets and it will instead sell Vista Home Premium and Home Basic, a stripped-down version, at the upgrade prices.

The move will not, however, affect the biggest market for Windows: PC manufacturers.

"Today, the vast majority of Windows licences are sold with PCs. Retail standalone sales, in contrast, have been primarily from early adopters and those building their own machines," explained Brad Brooks, corporate vice president for Windows consumer product marketing.

"We have observed market behaviour, however, that suggests an opportunity to expand Windows standalone sales to other segments of the consumer market."

According to Microsoft’s statement, the prices will be lowered after the shipment of Windows Vista Service Pack 1, the biggest update unveiled by the company since the launch.

Windows Vista is superior to Windows XP from all points of view and the users have access to several thousand new functions, Microsoft claims. One eye-catching element is the new graphical interface, dubbed Aero. It is remarkable first for its semi- transparent windows. Open several windows at once, and you can still see which other folders and documents are open beneath them.

Also, Microsoft says Windows Vista is the safest operating system ever. The users’ login system management has been modified almost completely, applications no longer have easy access to Windows’ basic components and these are but a few of the changes the Redmond company has made.

Though, it seems like despite 100 millions sold, Microsoft has some hard time to convince the users to ditch Windows XP in favor of the new OS. Last year, Steve Ballmer, Microsoft CEO, said that the company hopes to sell 200 million copies of Windows Vista, until the end of 2008.

However, it could be a tough mission as PC World, the guys behind the "top 100 high-tech products of the year", has labeled the OS as one of the biggest disappointments of 2007.

Though, Microsoft hopes that the Service Pack 1 will speed up the adoption of Windows Vista especially in the business market.