For at least two years, the company has said that the next version of its desktop OS would be based on the NT kernel. Instead, Microsoft (Nasdaq:MSFT) is now contemplating extending its venerable Windows 9x kernel for at least one more release, according to sources close to the company. Timing for the release of the beta and final code for this operating system update -- which may be called Windows 2000 Personal Edition, according to sources -- is uncertain. A Microsoft spokeswoman confirmed that the company is evaluating a refresh of its desktop operating system based on the 9x kernel, although she declined to provide details about pricing, availability or why Microsoft may be considering the new Windows 9x-based release. Microsoft is going to pick "the best possible combination" for its new OS, the spokeswoman said. "There are definitely efforts to develop a new version of a consumer operating system, but what kernel it's based on I don't know," she said. But beta testers and IS customers have their own theories about why Microsoft may be shifting its plans. Some testers have reported that Microsoft has had difficulties porting Windows 9x features, such as Plug and Play, to the NT kernel and is facing a number of incompatibilities with current Windows applications. "I haven't heard anything on this [Windows 2000 Personal Edition] specifically. But you've got to wonder: How much Plug and Play and PCMCIA support can they get into NT? And the games compatibility issue could be huge [between the 9x and NT kernels]," said one Windows developer. Microsoft would definitely have some challenges on its hands if it does decide to release another version of Windows. "At one point, every Windows developer was put on NT 5.0 [now known as Windows 2000]," said one developer, who requested anonymity. "Almost all of Microsoft's developers are focused on getting Beta 3 [of Windows 2000] out the door." Microsoft would also have to marshal its beta testing and OEM forces to prepare for another Windows 9x-based release as well. Most Windows 98 testers are in the midst of testing Windows 98 Service Pack 1 and OSR 1 (OEM Service Release 1). Microsoft, however, last week consolidated its Windows 98 OSR 1 and Service Pack 1 beta testers, sources said, by transferring Windows 98 SP1 testers to the OSR 1 beta program. In addition, Microsoft has accelerated the beta program toward beta 2 of the OSR, releasing a new build once per week. The latest build, 2136, as of last Friday, is considered stable by testers. Beta two is expected early this month, sources said. Once the OSR ships, however, all bets are off as far as what Microsoft will do next on the desktop. If it opts to perpetuate the Windows 9x kernel, it's uncertain how this decision will affect Microsoft's operating system strategy going forward. Microsoft will need to figure out how to position the new Windows 9x-based OS so that its role is well distinguished from that of Windows 2000 on the desktop. Microsoft officials have also said previously that the company is planning a Windows NT Consumer desktop release sometime in the early part of the new millennium. It's unclear how the addition of another Windows 9x release would affect the timing of Windows NT Consumer, or whether it would supplant NT Consumer altogether. IT managers, so far, are showing little interest in the pending new release. "From the corporate IT perspective, is it something meaningful or is it just window dressing? If it's window dressing, who cares?" said Steve Curcuru, resident Wizard at Mugar Enterprises in Boston and a PC Week Corporate Partner.