Apple Computer is putting the finishing touches on what could be the most important upgrade this year to its new operating system. But when the company will deliver Mac OS X version 10.1 is unclear. On Monday, the company cancelled its Apple Expo in Paris, in light of last week's devastating terrorist attacks in New York and Washington, D.C. Apple chief executive Steve Jobs was expected to focus on the OS upgrade during the trade show, with many analysts and Mac OS X 10.1 testers predicting its release at the event or in the days before it. Despite the national tragedy, the company did churn out at least one new beta, or test version, of the upgrade last week. And testers privately indicate that this recent test version is solid. "They could still make this month," said one person working with the beta who asked not to be identified. Although the market buzz may be about Windows XP, Microsoft's much-anticipated operating system release slated for next month, Mac OS X 10.1 is an important operating system release for Apple -- one that could open the floodgates of new software applications and of more Mac OS users choosing to upgrade. In late March, Apple delivered Mac OS X 10.0, the most significant overhaul of the operating system since 1984. But some features were missing such as DVD playback. Early adopters also complained of slow performance and the lack of native OS X applications, which may have slowed upgrades to the new operating system so far. And developers slammed Apple for stability problems that hampered their ability to move applications to the operating system But with Mac OS X 10.1, Apple appears to have licked most of these early problems, testers said, making way for an autumn ripe with new applications and Mac user upgrades. "OS X 10.1 is a major upgrade and, as such, will correct most of the problems users have reported: overall speed, window redrawing speed, and DVD authoring, et cetera," said Doug Stanfield, a Mac user and technology coordinator from Bellefonte, Pa. "For many Mac users who are using OSX -- myself included, and those in my office -- it will be the dividing line between using it some of the time and using it all of the time." Adam Masri, a Mac computer consultant in San Francisco, said the OS X upgrade means he can finally recommend the operating system to many of his customers. "I've told most of my clients to stay away from Mac OS X 10.0," he said. Although Masri likes the operating system's power, his "customers need more polish. They want DVD playback; they want fast window resizing, and they want OS X-native apps. The release of 10.1 and Microsoft Office for (OS X) will allow many of my clients to make the move." Signs that Mac OS X 10.1 is coming soon are everywhere. Dealers have started listing the new operating system in their catalogs, and testers report the recent beta is close to becoming final code. Apple had planned to brief industry analysts on the new OS last week but canceled the meetings after the terrorist attacks. In another sign that release will be soon, dealers such as MacConnection have added OS X 10.1 to their catalogs, although they don't yet list availability dates. Apple isn't saying much. "We announced it would be available in September," Apple spokeswoman Natalie Sequeria said last week. She declined to give a specific delivery date. When the upgrade becomes available, owners of older Mac OS 8 and 9 versions can upgrade for $129. Apple is offering the 10.1 upgrade to OS X owners for free, but the company will charge about $20 for shipping and handling. Apple may find Mac OS X 10.1 unexpectedly pitted against Windows XP. Microsoft's new operating system is slated for launch on Oct. 25, but new PCs with Windows XP start shipping 24 September. More than with any other Windows release, Microsoft is focusing on features recently championed by Apple such as easy handling of digital images, CD authoring and movie making. Regardless, Kevin Pedraja, a Mac user in San Francisco, doesn't "think the launch of XP will have much bearing on the introduction of OS X." Mac OS X's Unix heritage also is appealing to some people looking for an alternative to Windows. "Many of my PC-using friends are asking lots of questions about 10.1," Masri said. "A few of them actually want to buy new Macs after 10.1 is released. The (lures) of FreeBSD Unix, an Apple authored user interface and Apple's hardware design (are) just too good to pass up." Apple in some ways hasn't helped Mac OS X adoption. Although the company started installing the operating system on new Macs in May, some models shipped with inadequate memory. Apple recommends a minimum of 128MB of memory for Mac OS X, but many new iMacs shipped with half that and higher-end power Macs with just enough memory but no more. Apple beefed up memory in new Macs unveiled in July. Still, OS X 10.1 solves many of the problems with the most-recent release -- 10.04 -- and sweetens the mix with better networking and other feature enhancements. CNET News.com observed a recent test version, build 5G48, which shows improvements over an early August beta, build 5F24. The build includes DVD playback, which was missing from OS X but available for older versions of the Mac operating system as well as Windows. Other niceties: improved administration of AirPort wireless networking, DVD authoring, better Java support, easier Windows NT and 2000 networking, and faster searches. The 5G48 build also includes the final version of Internet Explorer 5.1 and newer versions of iTunes digital music software and the iMovie video-editing program. But even the OS X 10.1 goodie bag isn't enough for some. "I am waiting, for various reasons, to upgrade to OS X," said Carol Catiller, who runs a design business in Ft. Lauderdale, Fla. Among her reasons are concerns that Mac OS X's Unix heritage would make it more vulnerable to hacking or viruses, as well as the expense of upgrading software applications. Apple has tried to ease that transition, however, by providing support for older Mac OS versions using OS X's "Classic" compatibility mode. Still, software developers privately say OS X 10.1 will speed their delivery of native applications. Microsoft, for example, requires Mac OS X 10.1 for test versions of Office 10. "I expect major developers will also see it as the signal to get busy bringing OS X-native apps to market," Stanfield said. He asserts that the time is ripe for Mac OS X "to bring in a significant number of new users to the platform." Masri also remained optimistic, despite the Windows XP marketing blitz that Apple will have to overcome this autumn. "If there was ever a time when Apple could grab market share, this is it," he said. "They're firing on all cylinders now, even if the economy isn't." See the Hardware News Section for full coverage. Have your say instantly, and see what others have said. Click on the TalkBack button and go to the ZDNet news forum. Let the editors know what you think in the Mailroom. And read other letters.