"We're driving it [Vista] hard, but some people have gotten a little over-excited," he told analysts at a meeting in New York late Thursday. He clearly sees major revenue gains flowing from Vista and the new version of Office, but his view of the timing is apparently a bit more conservative than that of a number of analysts.

Ballmer was by no means bearish during his presentation, and he relieved Wall Street of one major worry, saying that Microsoft will slow spending growth in fiscal 2008. The software giant ratcheted spending by $2.7 billion in 2007; spending in 2008, he said, "will be somewhat less, not extremely less."

Ballmer also gave a nod to his major competitors, saying that Google (GOOG - commentary - Cramer's Take)has made it somewhat more difficult to hire and retain top talent, and that open source software poses a threat to margins. "Having a competitor who nominally appears to sell for free is always a challenge," he said.

The news put a small dent in Microsoft stock after hours; shares were off 33 cents, or 1.1% to $29.13 in extended trading.

Meanwhile, it appears that retail sales of Vista were noticeably slower in the week it launched than sales of its predecessor -- Windows XP -- were in its first week of release in 2001.