Microsoft is knocking $80 off the price of the US edition of Windows Vista Ultimate from $399 to $319, and the Home Premium edition falls $30 from $159 to $129.

Price cuts in the rest of the world are expected to follow real soon.

Vista has been on the market for about a year now, so a price cut is unsurprising.

This cut only affects the boxed edition of Vista - more than 90 percent of Vista sales come pre-installed on new PCs at a price negotiated between Microsoft and the PC vendor.

It's hard to believe that millions of Windows XP users were just waiting for Vista to get a little cheaper before committing themselves. Most users will hold off upgrading until they see Vista-only versions of their favourite applications, and right now that logic makes the jump to XP hardly worth it, let alone the leap into Vista. ®