FAQ: How much will Windows 7 cost you?

We parse Microsoft's convoluted prices to help you find the best deal

Last week, Microsoft unveiled retail pricing for Windows 7, the successor to Vista and Microsoft's hope for a revival in operating system buzz.

But as soon as the sheet was yanked off the price board, people started asking questions. How much for this? What will I pay for that? The questions were endless, it seemed, even though Microsoft culled Home Basic from the line-up, exiling it to the "emerging markets" category and banning it from retail.

You'd think that with just three retail editions -- Home Premium, Professional and Ultimate -- navigating price waters would be a snap. Not so.

Your questions on cost, our answers on prices follow.

What's the cheapest price for Windows 7? Unless you're buying a new PC -- more on that later -- the best bet now is to reserve your copy at Microsoft's online store or one of the retailers participating in the discount offer.

Microsoft's selling Windows 7 Home Premium Upgrade for $49.99 until July 11 in the U.S. and Canada, and Windows 7 Professional Upgrade for $99.99. Actually, "until July 11" might not be accurate, as Microsoft has made it clear with repeated references to "until supplies last" that it may cut short the deal. Since the company hasn't been straight about what that limit is, if you know you want Windows 7, get it sooner rather than later.

Most retailers have followed Microsoft on prices, but some have strayed. Sam's Club, Wal-Mart's members-only, mass-quantity chain, has the lowest prices we've seen: $44.88 for Home Premium, $94.88 for Professional. Costco, another big-box store, comes in second with prices of $47.99 and $97.99.

Should I wait? Is it possible Windows 7 will be cheaper in a month? Probably not, say analysts. Microsoft may return with another discount later -- as the Oct. 22 launch date gets within shouting distance -- but a deeper price cut this summer is very unlikely.

How can I find the best deal online? If you don't trust our scouting report (see above), or figure there's an even better deal, reach out to the participating retailers to see their upgrade prices. In the U.S., they are: Amazon.com, Best Buy, Costco, Frys, Sam's Club, Newegg, Office Depot, OfficeMax, Quill, TigerDirect and Wal-Mart. Microsoft's posted links to each retailer, as well as to its own online store, here.

I keep hearing about a free upgrade. What gives? That's the premise of what Microsoft has dubbed the "Windows Upgrade Option" (WUO) program, the newest version of what it called "Technology Guarantee" in the run-up to Vista's 2007 launch.

WUO provides a free Windows 7 upgrade to people who buy certain PCs between now and Jan. 31, 2010 that come with Vista pre-installed, or have been sold with a Vista license and then factory-downgraded to XP.

The upgrade, of course, won't be available until after Oct. 22, Windows 7's ship date; in fact, it might be weeks or months after that date until you receive the upgrade.

Is the upgrade really free? Depends. Microsoft's said it isn't charging computer makers for the upgrades, but some OEMs will slap on a shipping and handling fee. Others won't.

Hewlett-Packard, the world's biggest seller of PCs, has promised it won't charge a dime. But No. 2 Dell has been vague about any fee, saying on its Windows 7 upgrade page that "shipping charges will vary by region."

What PCs qualify for the "free" upgrade? Each computer maker has its own list, so check with your preferred OEM or retailer for more info. Generally speaking, however, machines equipped with Vista Home Premium, Vista Business or Vista Ultimate qualify. PCs downgraded to XP Professional from Vista Business or Vista Ultimate are also eligible, based on the Vista license sold with the system. Do I get a free upgrade to Windows 7 if I buy a shrink-wrapped copy of Vista now? Yes. If you buy a copy now of Vista Home Premium, Vista Business or Vista Ultimate -- an OEM, Upgrade or Full Packaged Product (FPP) version -- you should also get a coupon for a free upgrade to the corresponding Windows 7 edition.

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