If only Vista had the ability to run across multiple machines.
Which highlights the HUGE elephant in the room on this issue: the whole thing is a marketing ploy, not a tech related solution.
The Problem:Microsoft is finding its core PC maker customers are bleeding away at the very low end ($300 PCs) where the Windows OEM license is just too expensive to justify. If it allows this to continue, progress made in Linux on those devices will trickle up into more and more complex and sophisticated devices, quickly making OEMs wonder why they're paying for a Windows license on full price desktop PCs and laptops.
Microsoft's SolutionAnnounce that Windows can be stripped down and will be sold for low end PC devices (ie, a marketing announcement).
The Real Solution RequiredDeveloping a scalable OS that can actually work on low end PC devices. Currently, Linux scales down much better than Windows XP, and Vista is only getting larger. Microsoft has to invest in stripping down XP, another distraction from Vista.
Microsoft spent ten years working on WinCE, which doesn't work well enough for anyone to use in the hand held PC realm that it was expressly designed for. If you want to argue about technology limitations of the day, then remember that desktop Linux was being developed at the same time as WinCE, 1998-2008. WinCE can't blame its shortcomings on existing technology of the day.
There is no evidence that Microsoft has the technical chops to developer a suitable mobile OS. "Embedded XP" is just XP sold to fill the market for PC-based devices. "Embedded CE" is just WinCE sold for non-PDA devices. Microsoft has no mobile OS to sell, and clearly has no ability to develop one anytime soon. It couldn't deliver decent performance in Vista within a half decade of trying, and that was just a PC desktop OS overhaul.
Linux already works and is free.
Interestingly, Apple has ported its desktop OS to the iPhone/iPod Touch "WiFi mobile platform" as a low power, flexible, but intentionally limited feature set (ie, not a desktop GUI nor a small laptop), offering a different alternative to Linux based micro-laptops rather than trying to ape them.
Microsoft should have pursued an original strategy like Apple or delivered a mini-desktop that works like the Linux community. Instead, it's in the position of trying to FUD Linux to death with a press release, despite not having the technology to sell.
Of course, this has all happened before.
The Spectacular Failure of WinCE and Windows MobileZune Sales Still in the Toilet