Tech frontrunner Microsoft Corporation recently promoted the latest update of its entertainment-focused operating system, Windows XP Media Center Edition, which highlights new innovations in music, movies and literature.

Microsoft Chairman Bill Gates, called the system’s development 'a major milestone' but stressed it is still a long-term venture for the comapny.

'This is something where you have to be willing to invest like we have over a number of years and really listen to the customers, build the partnerships,' he said to the Associated Press.

Surprisingly, more consumers have already shifted to using PCs as an entertainment hub in their homes. Microsoft has sold nearly one million copies of earlier Media Center versions, which allow users to watch and record live television, listen to music and DVDs, and view digital photos, for about two years.

The new system will support high-definition television by the end of the year, in addition to allowing users to watch and record up to three television shows at a time and to pause live television.

Another potential advantage for consumers is that advanced copyright protection technology will make it easier to legally transfer music, videos and other data from Media Center PC to portable players and cellphones.

Gates said the company plans to put more money and effort into marketing the third version of Media Center, particularly to mainstream users. 'This is where we've decided to really raise the noise level up quite dramatically,' he said.

Reaching new audiences, cutting costs
Before now, the higher price of such advanced entertainment computers restricted sales mostly to gadget enthusiasts and premium entertainment fans. Yet the new systems may create a larger demand and greater competition, therefore cutting costs.

Entertainment computer systems may become more affordable as technology advances with scaled-down systems being offered for as little as $700 with the Media Center software. Also, beginning October 17, users will be able to buy previously announced 'extenders' for about $300 to transfer music or videos stored on their Media Center PC to another television or computer. The company will soon offer technology that allows Microsoft's popular Xbox game console to serve as a conduit for music and videos.

Jumping on the bandwagon
To rival Microsoft’s ventures, personal computer makers including Dell Inc., Sony Corp. and Hewlett-Packard Co. will also begin selling multifunction PCs that double as televisions, can record shows, and organize digital photos and music.

'This is a challenging vision to do because it's not something one company can do,' Gates said at a media event in Los Angeles.

Microsoft also is competing with TiVo Inc.'s cheaper and more popular personal video-recording devices and Toshiba Corp. and Gateway Inc. will also create similar products.

By the numbers
Microsoft has sold 188,000 Media Center PCs so far this year, but the total could reach 550,000 by year end with holiday shopping approaching. By 2008, 25 percent of home PCs are expected to have TV features leaving a huge market for the taking. Windows operating systems run 95 percent of the world's PCs. Microsoft sees home-computing and entertainment devices as a way to sell more copies of Windows.

Computers with the Windows XP Media Center Edition 2005 will cost between $600 and $3,000, Microsoft announced Tuesday.