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Week in review: XP update unleashed

But not everyone is in a hurry to upgrade to Microsoft's long-awaited update to its Windows XP operating system.

Microsoft's long-awaited update to its Windows XP operating system finally arrived, but not everyone is in a hurry to upgrade.

The company released Windows XP Service Pack 2 to manufacturing late last week, following a series of delays. Microsoft will make the free update available via download and via CD, but it is recommending that customers turn on Windows' Automatic Upgrade feature and get the update that way.

The SP2 update should be distributed to approximately 100 million PCs through automatic updates during the next two months, Microsoft said. Customers who choose to download manually will be able to do so by the end of August.

The update, which includes a built-in firewall and pop-up blocker, falls short of offering the robust security features provided by a number of stand-alone security vendors, according to industry players. But some analysts note that the future for those companies is less secure, as Microsoft begins to bundle an increasing amount of security applications into the operating system.

Many companies appear to be in no hurry to install the update. IBM told employees to hold off installing SP2 until Big Blue can fully test and customize it. The company's technology department said the delay is "due to known application problems and incompatibility with IBM workstation applications."

In the memo to employees, seen by CNET, IBM's internal technology department stated that Windows XP SP2 will "change the behavior of Internet Explorer and cause some application incompatibilities." The memo also noted that some "high-profile, business-critical applications are also known to conflict with SP2."

Although Microsoft recommends that consumers turn on Automatic Update to get the latest version of Windows, the software company is offering to let business customers temporarily block such upgrades. The tool, which is posted on Microsoft's Web site, allows companies that have Automatic Update running on their machines to leave the feature on while temporarily blocking SP2.

Microsoft's recommendation has been for businesses to test SP2 as they would test other big operating-system upgrades to make sure that there are no problems with custom applications and other software.

IPO circus
Google's co-founders may have talked themselves into a bit of trouble on the eve of the search star's anticipated initial public offering. Larry Page and Sergey Brin granted an interview to Playboy magazine a week before they filed for their $2.7 billion IPO earlier this year. Now their interview has surfaced in Playboy's September issue, which is already being shipped to subscribers and newsstands.

The interview could raise concerns with the U.S. Securities and Exchange Commission that Google has violated its mandatory "quiet period," IPO analysts say. Despite great efforts on the part of Google executives to keep mum during the months after the company's filing, an interview granted before the official registration could be a speed bump.

On Friday, Google amended its filing with the SEC to acknowledge some flawed information in the Playboy article and that its appearance during the quiet period is potentially costly.

In another sign that advertising-supported software is coming under increased pressure, adware leader Claria postponed its initial public offering. Claria, formerly known as Gator, postponed its IPO late Wednesday.

The holdup could reflect a softening market for Internet stocks: This week alone, MatchNet, PlanetOut and Nanosys postponed their IPOs. But the delay also comes as the adware business is having growing pains, according to many investors. Despite great strides to legitimize the industry, with mainstream advertisers and investors showing support, adware has maintained an air of the taboo.

On the tube
Sony has developed television technology allowing viewers to zoom in, pan and tilt the perspective of television broadcasts. The new DRC-MFv2 or "Digital Reality Creation Multifunction" controller chip would help unlock and take more advantage of the level of detail available in high-definition digital video. The chip will be used in television models that will be introduced at an event next week in Japan.

Meanwhile, a group promoting and developing a format for a next-generation DVD technology announced the completion of the first version of the specification, paving the way for disk production. The Blu-ray Disc Founders group said the physical format for the read-only version of Blu-ray Discs is complete, so manufacturers can begin preparing to produce disks.

Blu-ray Disc and rival format HD-DVD are considered next-generation DVD technologies and are based on blue lasers. Current DVD technology is based on red lasers. The blue-laser technology will allow greater storage capacities--up to 50GB for dual-layer rewritable disks, compared with 4.7GB on current DVDs.

Some of those discs may someday be available from Blockbuster, which launched an online DVD rental service aimed directly at undercutting competition from rival Netflix. Consumers can rent up to three movies at a time for a monthly subscription of $19.99, five DVDs for $29.99 a month or eight for $39.99. Netflix charges $21.99 a month for three movies at a time.

Also of note
Linus Torvalds has been called on to help an Australian open-source advocate in a battle to stop local companies trying to trademark the word "Linux"...In an apparent case of Internet graffiti at an online retailer, the cover of a book critical of John Kerry's war record was altered to appear as if the tract supports the Democratic presidential candidate...The Business Software Alliance--a trade group supported by Microsoft, Adobe Systems and other major software makers to enforce software licenses and copyrights--revealed a new mascot as part of a national campaign to scare kids out of using peer-to-peer networks.