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Hip-e laptop: Cold shoulder for cool gear

Sales haven't been so hot, but the laptop does get a certain amount of respect at Microsoft show.

SEATTLE--The Hip-e all-in-one computer may have made it into Microsoft's exhibit of cool hardware, but that doesn't mean it's made it back into the company's good graces.

The Hip-e's maker--Digital Lifestyles Group--got a note last week from Microsoft saying Digital's license to ship Windows had been terminated because of overdue royalty payments.

But a few unpaid bills didn't prompt Microsoft to pull the Hip-e from an exhibit at the Windows Hardware Engineering Conference (WinHEC) here. Instead of touting it as an item for sale, though, a Microsoft booth staffer said it makes a nice concept PC.

Rather than placing information about the Hip-e near the machine, Microsoft put flyers for a PC design contest it's launched to generate more innovative PCs.

Well, the Hip-e may not have made a big splash in the marketplace, but it sure was innovative. The flat-panel-based machine came with its own MP3 player and removable speakers, so it featured the equivalent of a detachable boom box.

special coverage
At WinHEC, Windows
turns 64--bits, that is.

For Digital Lifestyles Group, the problems don't stop with Microsoft. In a filing with the Securities and Exchange Commission on Tuesday, the Austin, Texas-based company said Circuit City has revised a key order for the Hip-e and now wants only 50 units for sale on its Web site.

Digital warned that it would need "significant financing" to pay what it owes to Microsoft or to ship more products to Circuit City. But the company said "it is unlikely we will be able to obtain any such financing in the near future." As a result, Digital said it has ceased ongoing operations.

Code name goes the distance
Microsoft has settled on a name for its R2 update to Windows Server 2003: Windows Server 2003 R2.

The move may sound obvious, but it's fairly rare for a code name in Microsoftland to survive and become a final product name. Often, the code names are more catchy than the final product's moniker.

R2 is groundbreaking in other ways too. It represents a new approach for Microsoft, in which the company seeks to charge for an interim update to its OS. R2 adds a number of features, mainly for branch offices and companies that want to let vendors and partners access the server. But at its core, R2 is the same operating system.

Customers who subscribe to Microsoft's Software Assurance program will get the update free, but others who want to move from Windows Server 2003 to R2 will have to buy a new server license. Because the core OS hasn't changed, though, companies won't have to pay a second fee, known as a client access license, for each PC that connects to the server. Also, R2 will become the version of Windows Server 2003 that's shipped with new servers when the software is released by the end of this year.

For those who want to try out R2, a new public beta is coming in the next week or two, but not this week as the company had planned.

In other WinHEC news...
Microsoft said that it's joining the WiMedia Alliance, which focuses on ultrawideband technology. Also, for those wondering how the company is enabling the secondary notebook displays it showed off for Longhorn, the screens use the same technology that powers the company's SPOT watches.