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At CES, Gates tells what a geek wants

The Vegas extravaganza has a lot to offer even the world's richest man. Plus: XP's legacy to computing.

LAS VEGAS--Even the world's richest man craves better home entertainment gear.

Bill Gates says his house is already wired to the hilt, with touch screens and high-definition displays. But, in the second installment of a two-part interview with CNET News.com, the Microsoft chairman admits he's ready to revamp his system to add "some vision and speech-type things."

What catches his eye at this year's Consumer Electronics Show? Gates says he's impressed by the number of high-quality, low-cost digital displays and the continuing spread of wireless technology.

As Windows Vista's debut looms, Gates takes measure of Windows XP's legacy to computing. And as he enters his final year full-time at Microsoft, he talks about his foundation and the work he'll be doing there.

Q: Every year at CES we see an array of futuristic PCs, and yet the types of computers that most people buy tend to be the same old desktops and notebooks. Do you think that's really going to start to change, and why?
Gates: Vista enables new capabilities. We didn't have the touch; we didn't have Media Center ready for the mainstream; we didn't have the SideShow, these smaller form factors. The hardware is improving a lot now, so you can get all the way down to a 6-inch display to let you read and get your full capabilities there. I do think we're seeing an expansion, and Vista is a big enabler.

What will be the biggest change that Vista will bring to everyday computing?
Gates: Vista is part of the infrastructure that lets you do high definition, let's you do advanced wireless capability. It brings security up to a level that the PC is more trusted. For example, building in parental control that you had to buy something and configure that and so you never trusted yourself--did you do that right now? It's simpler because now it's part of the platform. So it drives things, some of which take time after Vista comes out, some of which are quite immediate. That's the coordination we had with our partners, and there are many, many more like it.

For me, the search function has made a big difference. It's built in; applications call those APIs. The visual experience (is) just a lot better for me than what I had before, so my machine that didn't have Vista...I felt bad when I used it.

When you look back at Windows XP, what do you think is the biggest change in computing that XP brought?
Gates: XP was part of this explosion of the Windows PC to the center of a lot of experiences. Before XP came along, portables were a very small percentage of what people did, so as we put the wireless capability in there, the standard stack in there, we did some things that let Wi-Fi really take off in a big way, that let portable computers take off.

We did much better power management in XP than we'd ever done before. So could we have had this portable explosion? No, we couldn't have.

Vista takes that to the next degree because portables are growing, and that's even before you get to some of the more breakthrough things like Tablet or the small ultramobile type form factor. So we can look back on every Windows release and say it ushered in something new. Here, you could say it ushers in 64-bit.

But certainly at the server level...people are starting to push the limits, so if you don't relieve that memory pressure, people start to do very complex things like they did when we pushed the original 8086 limits, and now we've completely avoided that.

So there's quite a list you could pick. A lot of them have to do with new scenarios that were never being done before. RSS in the platform--at the time of XP, nobody knew what that was, why that was a big deal. Now I sit in IE and I mark things, and they just show up in Outlook. I take that for granted.

What types of things do you bring in via RSS?
Gates: I sign up to the kind of blogs that you might expect. I sign up to a lot of SharePoint sites that now can generate RSS notifications, so I'll be able to look and see, do I want to go and visit that? A lot of internal Microsoft sites where they're changing plans or schedules that I--I'm not going to pull them all, but I want a sense that I can do that.

I use my inbox rules to put these different things in folders and then, depending on what context I'm in, I'll go in one of those folders, just hit the urgent things, or go and hit some of the additional things. It saves me a lot of time. I see way more than I would otherwise.

The digital home is one of the big topics here this year. Since you have access to, I would imagine, any technology you want, I'm curious: What kinds of things do you have in your digital house that you think the average person will have in the coming years?
Gates: I can call up any movie, anywhere in the house. I can call up any of the music, and it's all just one totally integrated system. I have touch screens around. I have great high-definition screens. That system was actually done some time ago, so within the next couple of years, I'm going to take Media Center and rebuild it and take on another level of ambition.

I think I'll start to use some vision and speech-type things that would have been too advanced when I did the version that I have right now, so I want to get out there on the bleeding edge again.

Revamping the living room is one of the projects coming up for you?
Gates: Well, actually, I'll get other people to do the work, but what I did in my home helped drive some of those Media Center scenarios. Now I want to try and experiment with what the next frontier should be for those, and as screens become pervasive, as natural input becomes more practical, there's a lot more you can do. I'll show in my keynote tonight this idea of pervasive screens in the kitchen, in the bedroom, where the wall itself, in terms of the theme of the room or even picking what you're going to wear, seeing what's going on--as those screens are everywhere as you can talk and use cameras, it's really a lot different than a classic PC experience.

Outside of what Microsoft's doing, what types of things that we're going to see at CES or in consumer electronics, what's the biggest thing that's not involved with Microsoft that you think is making the biggest impact?
Gates: I think everything here does fit under these themes of connected and high fidelity.

You know, every year we see big, amazing LCD screens. Obviously, (there are) big price drops this year, big volume increases, so we'll see that. Taking care of the lack of certain color capabilities, these new backlights are amazing; the plasma people stepping up for their piece; the improvements in just the capacity and the bandwidth.

I love seeing that 802.11n is happening here. Now that's a cutting-edge thing, but people are sending high definition over multiple input, multiple output-type devices. Those will get standardized; the price will come down. Here, Toshiba, when you connect up your video, they're using ultrawideband to send a DVI video signal from here so that you don't have to connect. It's a docking station with no cables. The only thing you need a wire for is for the power. Everything else, you just come within proximity, and there it is. So that's a cutting-edge thing, that it's low-volume this year but over the next several years really will get out there in a huge way.

The relationship of phones to PCs, we'll see some new things there. The relationships of PCs to services up on the Internet itself, that's another hot area that we and others are investing in. So everything is here, from purple containers for devices to neat new software. I get to spend a few hours looking around tomorrow.

Obviously, you're still working full-time at Microsoft, but the Gates Foundation is getting a lot of your attention. Health care and education have been two of the big focuses. What are the kinds of things that you're starting to look at in your foundation work?
Gates: The change for me doesn't come until mid-2008. I'm totally full-time at Microsoft and get anywhere from 10 to 15 hours on my foundation work. That's going very well. We've got great scientists, and people understand that the challenge is there, and so I look forward to understanding those things better. My new time really will go into health and education, some of which, hopefully, I'll help Microsoft in those areas but very much the foundation getting some of that input.

Both Microsoft and the Gates Foundation have education as a common focus. You and other people have been talking about the problems and putting a lot of energy into it for years now. Especially in the U.S., is the education situation getting better or is it still not where it needs to be?
Gates: Education is complex to even measure. My daughter goes to a school that's been using portable PCs for every student for over six years now. They use tablets. And if she doesn't have a math textbook, she just cuts the problems out and tries things out. She can e-mail the teacher whenever she wants.

So when you get a glimpse of that, and how interactive it is and how it's easy to analyze, OK, what's going wrong here? And that kind of support that you get from simple communications, and even sending the homework to the parents and saying "Hey, I need help with this" or "Hey, I'm proud of what I did."

You can see a glimpse that we've got some really great things--the lectures that are out there on the Internet now. If you can find the right ones, it's kind of amazing, and Microsoft and others can do more to make that simple so that lectures are the simple, the easy part. And then collaborative learning--whether that's just finding people online or even doing the collaborative learning online--software can help with that, you know, build a marketplace that that all coalesces around. We're quite enthused about it.