Live at the CES Bill Gates keynote

[intro] On-the-floor coverage of Bill Gates' keynote speech for this year's CES [/intro] Five minutes to go until Gates takes the stage, and the vas

[intro] On-the-floor coverage of Bill Gates' keynote speech for this year's CES [/intro] Five minutes to go until Gates takes the stage, and the vast Palazzo ballroom at the Venetian Hotel in Vegas is buzzing with... well, quiet chatter. There's not the same religious high that accompanies a Steve Jobs stage show... the assembled press and VIPs are subdued, perhaps from being made to wait an hour and a half before being allowed into the event.

The huge screens either side of the stage are running slides showing the current Microsoft portfolio... there's go a picture-perfect pair of American teens swapping tunes on their Zunes... now an immaculate teen in a green hoodie clutching his XBox 360 controller... and there's a nuclear family on the sofa, watching God knows what... and hey, there's a Zune in a car... and now a couple with a Siamese cat on their lap, and the Siamese is yawning.

Here we go. The proper preview video... lots of networking, connected couples, families and business folk. Gears of War on a 360, with our hoodie teen boy playing in his bedroom... and at last, Heeere's Bill!

Gates, in blue shirt and chinos, begins. 'Will I do the keynote next year? Not sure... I may talk more about infectious diseases, and they which they may not want.

'The digital decade is happening... two billion digital photos taken last year... over 40% of US homes have multiple computers... the younger generation spend more time online than they do watching TV.

'We have incredible devices with incredible fidelity... great cameras, high definition TVs... network bandwidth has gone up... processors are opening memory capability up to 64 bit without paying more money. Graphics resolution has us thinking about representing reality on a screen: this presentation richness is creating a virtual reality.

'We have great hardware, but we're missing things... namely the connections. It's an environment where people want to work across multiple devices: I want my music, my family schedule, I want to collaborate with people at home as well as work.'

'It's a big year for us this year. First up is Vista, the highest quality release we've ever done. Vista RC1 went to 5 million people. Did loads of performance simulation, equiavlent of 60 years of testing. Biggest investment ever in a piece of software.

'Office is all new too. We've observed over a billion sessions watching people using office, and we know it works.

Gates invites Justin Hutchinson, Group Product Manager, to run demo of Vista and to show a few features we haven't seen before. Oooohh goes crowd.

Hutchinson: 'You know that Vista will search, but we're announcing that it will now search across every PC on your home network.' First polite round of applause.

Then Hutchinson restores a picture using a new feature called Shadow Copy, which seems to do the same as Apple Leopard's Time Machine. Hutchinson quips: 'It's better than going back in time.' You couldn't write this stuff. Knowing claps from Microsoft fan boy contingent.

'Now to Word: hits a link within a document, which launches Windows Live Search. Hutchinson switches to Maps, and we're into a 3D view of Vegas, which our man literally drives through using a 360 controller. Wild applause.

Photos: edit and organise in photo gallery - handles stills and videos. Want to burn to DVD. DVD Maker in Vista makes it easy to share memories. Takes a video and adds themes, with previewing facility before you burn. More whoops from the crowd.

Over to Vista Ultimate, which downloads new features all the time - one new one is Group Shot. Two pictures of kids: each has a flaw. Demo cuts and pastes two together to form a single, perfect image. It's brilliant, actually.

Next up, DreamScene for Vista, with - wait for it - full motion desktop... go to any video and set as desktop background. People are fainting around me with excitement.

Hutchinson steps down, reminding us that it's 22 days to Vista launch.

Gates is back. A new product in new space, working with HP, defining Windows Home Server. We switch to a video: calendar, music, XBox, TV shows, photos, auto back-up and safe. Terabytes of storage. Ends clip with 'Bill Gates: Chic Geek'. The product's the HP MediaSmart Server.

Out second half of this year, running Windows Home Server software. Features auto back-up, plus connectivity to Zune, XBox, and handles remote connectivity. Expandable: plugs in new storage. AMD and Intel are building hardware reference designs.

Gates steps aside again, this time to Robbie Bach, president of entertainment devices division. 'Connected entertainment: first part is content, second part is community. Our challenge is to bring two together. Hardware, software and service all have to be there together.

'First music: year ago, Gates introduced URGE music service. Still committed to it. This year, we added second part - Zune. Very excited, we are No.2 player, a million copies of Zune. Service will expand, with software and hardware, community will grow. We're not going away, we'll be there for years to come.

Now XBox 360. Sold 10.4 million consoles in 37 countries, 160 HD games. Gears of War has sold 2.7 million copies, up there with Halo as a franchise.

Will double to over 300 titles within a year. One title will be the story of 2007, Halo 3. Now the Helo 3 video: quiet, two kids looking at the sky, discussing what's up there. Cuts to our man in war zone, putting on famous helmet. Looks all but real... breathtaking.

XBox Live: largest social network on TV, five million members. Want to expand community: lets take live experience and bring to Windows.

Laptop running Vista... husband at home on 360 ... wife can join him on games. Starts game of Uno: start multiplayer using 360 controller through Vista. Live Guide looks same as it does on 360, into friends list. Shows 360 player accepting invite, and joining the Vista player. Will roll out this summer, and is called Live on Windows.

Now for iPTV: Microsoft is in the market with five providers, including BT. Will grow as a market hugely. Now the big news - iPTV running on an Xbox 360. Demo... problem while Gears of War loads... and not sure if the demo actually worked. iPTV on the XBox will be available this year.

Back to Bill, and he's talking cars. Joined on stage by Mark Fields, executive VP of Ford. 'New Sync is fully integrated voice-activation system for phones and music devices. Exclusive to Ford, running Microsoft software. Connects your devices... Zunes, iPods. Access to full capability of your Bluetooth phone, with a voice command away.

'Downloads everything through car's audio system. Can even maintain a call conversation while getting into a vehicle. Text messages call be read to them, and it will interpret internet slang.

'Accepts most portable music players, and will accept Flash and Zip drives. Fully upgradable, so you'll never have to worry about compatibility. We'll roll it out quickly and affordably... available on a dozen cars this year, including new Focus.

And, bar a short and dull demo from Gates showing the kitchen of the future (see picture), that's a wrap...