The latest public outrage surrounding Microsoft and Vista has been going on for two years actually, but it’s only after the lawsuit filed against the company that it’s garnered significant media attention. The suit filed by disgruntled computer buyers is all about how Microsoft allegedly misled users knowingly when giving out “Vista Capable” certification to underpowered systems. The trial means that court documents are coming to light which relate to the confusion around the Vista marketing campaign which caused the market to be filled with “Vista Capable” computers that only supported Vista Basic and were unable to support Vista’s driver model or much-hyped Aero interface. The documents reveal more about discussions between Microsoft, Intel and PC vendors. They show Microsoft undoubtedly knew something about the repercussions of allowing Intel systems with older video cards to be allowed into the program, and how customers may be misled. Nevertheless Microsoft chose to take that path.

A 29-page filing was recently made, following a 158-page filing this February, and it raises concerns over PC buyers being intentionally misled by Vista logos placed on PCs in 2006. Attorneys of the plaintiffs list emails discussing how support for the Windows Display Driver Model (WDDM) is a requirement for PCs earning the Vista Capable/Vista Ready stickers before the launch of the new operating System. They also discuss Microsoft’s knowledge that computers running Intel i915 GM integrated graphics cards do not meet these requirements and were not considered to be worthy of Vista.

Why is this problematic? Because Intel held a 40% market share of the PC graphics market with its integrated display adapters at the beginning of 2006. At that time, less than 30% of PCS were truly capable of running Vista. That of course created the danger of a large number of PCs being stuck with nobody to buy them, and that meant Intel wasn’t going to be happy. The company asked Microsoft to temporarily withdraw the WDDM requirement clause.

The filing cites an email conversation between Microsoft and Intel execs on January 30 of that year. The communication had apparently reached the top management of each company by then. Its result was that Microsoft did indeed drop the WDDM requirement on January 31, 2006. Intel, very satisfied, was able to ship millions of Vista ‘Capable’ computers (at the time Vista Capable had come to mean that a PC was able to run Vista without the AeroGlass surface), and made around $200 million per month doing so, says the filing.

Sony, which had already invested in the Intel 915 chipset, was very enthused about the decision; Dell was confused and called the strategy “clear as mud”; HP, however was angry, as they had invested in higher-end graphics systems to prepare for Windows Vista. The way Microsoft reacted was consistent with outside views. Microsoft employees’ and executives’ emails from the period described the decision (which apparently was carried by vice president Will Poole, who left the company in September this year) as wrong and potentially misleading. Microsoft reinstated the WDDM requirement on January 30 2007, Vista’s launch day.

Why then, the question remains, did Microsoft cater to Intel’s demands and allow them to get rid of their stock at Microsoft’s expense? The answer may come in an email sent from Steve Ballmer to the Windows-in-charge-executive then Jim Allchin, stating that Poole should be brought “under control.” This indicates Poole may have been a loose cannon who made the decision to include the 915 chipset into the program on his own. The outcome of the class-action lawsuit is yet to be determined, but the reasons are now clearer, if the filing’s claims are true. It was company interests, not consumer interests that were protected. The WDDM requirement dropt safeguarded Intel from huge losses, and helped Microsoft sell a much higher number of Windows Vista licenses to PCs with Vista Capable logos on them.

In the end it was about the money that was at stake, and Microsoft’s decision helped Intel the most. Little was done in the way of helping Microsoft’ interest though, as it ultimately got slapped with the bill and another public image scandal. It really looks like Microsoft ultimately shot itself in the foot with this one.