[+/-] XP lite or XP late?

Microsoft has announced it will offer a low-cost starter edition of its Windows XP operating system in Asia starting in October, as it strives to hold onto market share facing erosion from the open-source Linux system and software piracy.

"XP Lite," officially called Windows XP Starter Edition, will ship on new, low-cost desktop PCs available through manufacturers and Microsoft distributors in Thailand, Malaysia and Indonesia. The operating system will feature "localized" help features, country-specific wallpapers and screensavers, and "preconfigured settings" for features that might confuse novices.

The tradeoff is that the software will be deficient in other areas. For example, XP Lite will allow users to run only three programs simultaneously. Other downgrades include a mere 800x600 display resolution maximum and no support for PC-to-PC home networking, sharing printers across a network or more advanced features such as the ability to establish multiple user accounts on a single PC.

This sounds like a truly bad product. If Microsoft wants to compete with Linux, shouldn't it offer something better than Linux? If it wants to compete against piracy, how is XP Lite going to compete effectively against pirated versions of regular Windows XP?

For that matter, how will it compete against pirated versions of Longhorn? Last year Malaysia's brazen software pirates were already hawking the next version of Microsoft Corp's Windows operating system years before it is supposed to go on sale.