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Acer, Asus, and MSI may have been busy making headlines this week, but not everything is about hardware. Microsoft and Xandros both made moves this week that could have a major impact on the low cost ultraportable laptop market:

• Microsoft softens its stance on Windows XP for low cost computers: While Microsoft may have stopped selling Windows XP directly to consumers on June 30th, there are still a few ways to get the operating system. You can buy a pricey new computer with Windows Vista or Business and pay for downgrade rights. Or you can pick up a cheap laptop. Vista doesn’t run that well on machines with tiny hard drives (or solid state disks) and little RAM. So Microsoft is keeping XP alive for a few more years for companies like Asus and MSI to install on tiny laptops. This week Microsoft eased its definition of low-cost computers a bit, so now computer makers can install XP on systems with 14 inch monitors or 160GB hard drives.
• Xandros buys Linspire: In other operating system news, Xandros, makers of the Linux-based operating system that Asus uses on the Eee PC (although Asus customizes the heck out of it), has purchased Linspire, the company formerly known as Lindows. While Linspire never really caught on as the Windows XP-replacement it aimed to be, the software is easy to use and includes the ability to run many Windows applications out of the box. Perhaps future Eee PC models will take advantage of some of the better features of Linspire.