Windows XP Embedded with Service Pack 1 resolves glitches discovered since Microsoft released the operating system last year and also adds new features to the product. The software is a modular version of Microsoft's flagship operating system that can be installed on embedded devices, such as cash registers, slot machines or ATMs. This embedded version uses the same code base as Windows XP, but Microsoft does not license the product for use on PCs. The Redmond, Wash.-based company also announced a six-month, $995 (about £650) promotional price on kits for creating devices using Windows CE .Net and Windows XP Embedded. Analysts did not necessarily see Service Pack 1 as a good thing, contending that bug and security fixes should be separate from product updates. "Microsoft just cannot seem to find the discipline to keep features and fixes separate," said Directions on Microsoft analyst Michael Cherry. "I can see no reason why these have to travel together, and I think there are valid scenarios where an embedded developer wants only...the security fixes." Among the enhancements in the release: Remote Boot, for starting the device from a server; Device Update Agent, which is used to apply software updates; System Development Image Manager, a tool for deploying Windows XP Embedded run-time images; Footprint Estimator, for estimating the size of the operating system before it is added to the device; USB 2 support; and support for the .Net Framework. The .Net Framework, a key part of Microsoft's overarching .Net development architecture, automates many development tasks when using the company's Visual Studio.Net tools, and helps software run reliably and securely across multiple servers and computers. Analysts questioned whether Microsoft's decision to use the full .Net Framework in Windows XP Embedded -- as opposed to the smaller .Net Compact Framework -- makes sense given the limited memory available in devices. "Why does the decision to use Windows XP Embedded (by device makers) rule out the ability to use the .Net Compact Framework?" said Cherry. Keith White, senior director of Microsoft's Embedded and Appliance Platforms Group, said the use of the .Net Compact Framework with Windows XP Embedded is a "possibility. We haven't made any decisions on that yet." Antitrust spotlight Earlier this year, during a two-month remedy hearing in Microsoft's antitrust case, state plaintiffs shined a spotlight on Windows XP Embedded. The nine states and the District of Columbia argued that Windows XP Embedded would fit one of their proposed remedies and asked a federal judge to compel Microsoft to release a second version of Windows XP without so-called middleware, such as Web browsing and instant messaging technologies. Microsoft made no changes to Windows XP Embedded as a result of the company's separate settlement with the Justice Department and nine states. The three parties cut the deal more than 11 months ago, but US District Judge Colleen Kollar-Kotelly has yet to approve or reject the pending agreement. She also must rule on the plaintiff states' request for stiffer sanctions. Her decision on both matters could come at any time. "Our embedded products don't fall under the (settlement) or the antitrust rulings right now," White said on Tuesday's conference call. "The ruling has come back on the desktop operating system products specifically. Remember the nature of these products is that you can pick and choose which components that you want based on the device you are building." Cherry said he found "interesting that they do not see it as part of the Justice Department settlement -- although they are correct, you can accomplish...Justice Department compliance in the componentisation." But Microsoft did make changes to its Windows XP operating system with the release of Service Pack 1 for that software last month. The update introduces a new control for managing middleware and can be used to hide access to five Microsoft technologies: Internet Explorer, Windows Messenger, Windows Media Player, Outlook Express and Microsoft's version of the Java Virtual Machine. No software code is removed in the process.