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The latest prerelease version of Vista is getting generally positive reviews, a sign that the long-delayed successor to


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Windows XP operating system has a fighting chance to hit its latest launch deadline.

"Initial feedback has been positive with many testers citing significant improvements in key areas such as application and hardware compatibility, user experience, and performance," Goldman Sachs analyst Rick Sherlund wrote in a note to clients. "This is in sharp contrast to the negative feedback following the release of Beta 2 in May, implying that the Vista team has made substantial progress with the product over the summer," he added.

The current version of the software is known as RC-1, which stands for release candidate one, a step closer to completion than a beta version. There will certainly be a number of release candidates before the software is released to manufacturing and then sold.

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The company's testing process uses millions of volunteer computer enthusiasts (along with Microsoft professionals), and much of the feedback is posted on blogs and home-grown Web sites scattered across the Internet. Microsoft also will distribute the software to technology publications later this week.

Microsoft's latest self-imposed deadlines are a November release to large business customers and general availability in January. Despite the positive early reviews, it's not clear if Microsoft will be able to find and squash the remaining bugs in time to hit those marks.

Sherlund, for example, says making the deadline is still "iffy, but the main point is not so much the timing, since our estimates already reflect a delay, but that the product is showing good progress and should be a strong contributor to accelerating growth by the end of the March quarter." His company has an investment banking relationship with Microsoft.

Similarly, Michael Cherry, an analyst with Directions on Microsoft, said that RC-1 is moving in the right direction, but "I think Microsoft has more work to do." Cherry, who is also a beta tester, said he is still finding new bugs in the software. "By now, I should be confirming that they've caught the issues I raised earlier, not finding new ones," he said.

The company also set pricing for the new software: full retail versions of the software will be Windows Vista Ultimate, $399; Windows Vista Business, $299; Windows Vista Home Premium, $239; and Windows Vista Home Basic, $199.

Upgrades from Windows XP are priced at Windows Vista Ultimate, $259; Windows Vista Business, $199; Windows Vista Home Premium, $159; and Windows Vista Home Basic, $99.