As Eric Lai's excellent analysis details, virtualization presents Microsoft with some unique problems as far as how its DRM and EULAs work, or don't work, with each other. After all, not only does virtualization make it easy to get around Vista's plethora of anti-piracy schemes, it also will be easier for the Vista-run home entertainment systems that populate Redmond dreams to sidestep the DRM of the music and movie industries.

But corporate customers have some serious plans for virtualization, so Microsoft's original compromise was to use the Vista EULA to prohibit use of virtualization for Vista Home Basic and Home Premium editions but to allow it with Vista Business, Vista Ultimate, and Vista Enterprise. But no doubt there were many in Redmond, both engineers and marketeers, who were unhappy with that solution.

It's inevitable that one of the main uses of virtualization technology in the coming years is going to be by Linux and Intel Mac users who need to run a Windows app or two and don't mind the performance hit of a virtual system. Microsoft had to choose as to whether to punish such people for their choice of operating system or to treat them as a market opportunity. They've chosen the former, it appears.

Which is pretty stupid. After all, anyone who wants a virtual PC running Vista basically has three choices. You can buy a full retail version of Vista Business, which costs at least a hundred bucks more than Home Basic (and far more if your system came with a Window OEM license). You can buy Vista Home Basic (or use or upgrade your OEM license), but then you'll be violating the Vista EULA by using it in a virtual system. Or, since you're going to be illegal in Microsoft's eyes anyway, you can just acquire a Vista-enabled virtual PC and just not pay for it at all.

Sure, some are going to opt for pirating it no matter what choices they have, but why push the rest in the same direction? Clearly, last week's aborted attempt to give the Vista EULA more lenient virtualization language shows that many in Redmond recognize it's silly to keep the EULA this way. Engineers understand that Microsoft has to make its peace with virtualization, while marketeers are going to recognize that encouraging legal use of virtual PCs could be a way to try to win back those who've soured on Windows.

So where did the pressure to keep the Vista EULA unchanged come from? It's got to be the lawyers. Who else is going to think that the solution to fighting a form of piracy that DRM can't prevent is to have a prohibition against it deep in the fine print? It's not the first time that Microsoft has allowed its very large and influential legal team to influence its thinking in the wrong direction, but it might be one of the dumbest.

Be you engineer, marketeer, lawyer, or Indian chief, let's hear your thoughts. Post your comments below, phone the Gripe Line voice mail at 1 888 875-7916, or write me at Foster@gripe2ed.com.