On Wednesday night, Microsoft CEO Steve Ballmer is going to step on stage at the Venetian Hotel’s Palazzo Ballroom to give the keynote address that kicks off the Consumer Electronics Show. It’s the first time for Ballmer, who’s taking the slot that his predecessor Bill Gates has had for years.

It’s widely expected that Ballmer will publicly unveil Windows 7 Beta 1, just as Gates used the stage to announce previous Windows versions. He’ll no doubt have an entourage of product managers to help him do the actual demos, hopefully inspiring a wow or two from the assembled throngs.

I’m looking forward to the demo, even though I don’t expect any surprises. Mostly, I’m going to be listening between the lines, paying attention to the things that Microsoft chooses not to talk about. In the spirit of the occasion, I offer up the following predictions of things that Ballmer will take great pains to avoid saying.

1. “Some of you are going to hate our new OS, no matter what we do.”

Building software is part art, part science, and all compromise. Every design decision involves tradeoffs in performance, in ease of use for novices versus raw power for experts, even in esthetics. I addressed some of these issues in a post I wrote last year, How do you benchmark real-world work? I fully expect each succeeding wave of Windows 7 reviews to include plenty of “Microsoft sucks” commentary. Especially from InfoWorld.

The back and forth between my ZDNet colleague Jason Perlow and me last week illustrates this principle perfectly. Jason (and the commenters who agree with his point of view) want Microsoft to offer an option that allows them to use their system using the Windows interface they mastered in 1998. I think pursuing that backward-looking strategy would be a massive waste of limited development resources.

The bottom line is you can’t please everyone, and one size will never fit all. So the big question for Microsoft is whether they can please enough people and generate enough positive buzz to drown out the negative voices.

2. “Good luck finding drivers for all your old XP-only hardware.”

Over the past few months, I’ve installed and used Windows 7 on a dozen separate systems, representing a wide range in hardware capability and all sorts of different form factors. Virtually every one of those systems had also run Windows Vista at some point in its lab lifecycle, which made it easy for me to track down the best drivers for each subsystem and peripheral.

Over the course of the last two years, I’ve discarded or replaced a handful of devices that didn’t work at all with Vista: several network cards, some storage adapters, a scanner, a TV tuner. In every case, I had to replace the unsupported part or do without. The good news is that the driver model for Windows 7 is identical to that of Windows Vista, so all the hardware I now own (and all the drivers I’ve bookmarked and saved) will work on upgraded systems.

So, what happens to people who decided to skip Vista and stick with XP, for whatever reason? They get to face those exact same issues. If your device doesn’t have a driver for Windows Vista, it will not work under Windows 7. Period. Full stop.

3. “We’re still at the mercy of our clueless OEM partners – and so are you.”

Some of the worst complaints about Windows Vista came from users who were subjected to horrible installations from OEMs, with poorly written drivers, inadequate hardware, and great heaping helpings of crapware to slow everything down to a crawl.

I had the chance to see this phenomenon up close and personal last year, when I rebuilt a Sony VAIO whose performance with Windows Vista was so awful that its owner basically wrote it off and bought a new MacBook. After a clean installation, including Vista Service Pack 1, its performance was eye-opening and impressive.

Since that time, Sony, Dell, and other top-tier OEMs have cleaned up their acts impressively. But even if Windows 7 turns out to be an excellent operating system, there’s still the potential for it to be scuttled by sloppy or greedy hardware makers. Microsoft executives are jawboning like crazy with their hardware partners; you know they’ll be holding their breath after the launch to see how those systems perform in the real world.

4. “It might be years before we have a killer application for Vista or Windows 7.”

The myth of the “killer app” has never been stronger than with Windows Vista. The idea refers to some program that performs an absolutely irresistible function and only runs on a particular platform. If you need that program, you have to upgrade to the new OS.

But software developers, including Microsoft, aren’t interested in cutting off customers who still use older platforms, especially in this tight economy. So, as a result, most popular Windows programs these days are written to run on Windows XP, Vista, and (soon) Windows 7. And there’s no sign that’s going to change anytime soon.

If anything, Microsoft is doing its best to avoid any kind of Vista-only software. The new Windows Live Essentials bundle, for example, works on XP and Vista, as does Windows Live Mesh and every member of the Microsoft Office family.

None of those programs are going to drop XP support anytime soon (although it’s remotely possible that the next version of Office will work only on Vista or later). That strategy of wide backward compatibility is the right thing to do for customers, but it bolsters the argument of those who contend that a killer app is the only reason to upgrade.

5. “Our licensing terms are as hopelessly confusing as ever.”

Microsoft hasn’t gotten around to announcing how many editions of Windows 7 it plans to produce or what their prices will be. But one thing is certain: the confusing, multi-layered Windows business model isn’t going to change.

Royalty OEMs (the big PC makers like HP, Dell, Sony, and Toshiba) have one price list and one set of terms. Small system builders have another set of rules. Retail copies are horrendously overpriced.

Enterprise customers have to navigate through a thicket of price lists and volume licensing programs that actually require their own certification programs. And even Microsoft sometimes contradicts itself completely on how licensing terms apply to some customers.

Those are my predictions. Sit back, grab some popcorn, and watch the keynote for yourself, in low (100k), medium (300k) or high quality (750k) streams.

A blog posting on Microsoft's Technet by Keith Combs hinted on Tuesday that a beta version for the company’s new operating system Windows 7 would be made available as early as January, 2009.

The update is confirmed on the basis of a blog posting. Combs also recommended those who wanted to get hold of the Windows beta 7 to sign up for participation in the upcoming MSDN developer conferences.

The blog posting suggested that all who were to attend the aforementioned conferences would receive a DVD with Windows 7 beta 1 on it, adding though that the attendees for the December events would not benefit from the offer.

Keith Combs stated that the DVDs containing the beta version of Windows 7 would not be ready until January 13, the earlies

The company also said, "Windows 7 will offer more options than ever to customize and personalize Windows-based PCs with styles that match the user's personality," though it provided little detail.

Perhaps most significantly, Microsoft said applications that are compatible with Windows Vista will work with Windows 7 because the two operating systems share the same basic architecture. "Windows 7 extends developers' investments in Windows Vista," the company said in a statement.

Upon its debut in January of last year, Vista was roundly criticized for its lack of compatibility with applications built for the older Windows XP operating system. The problem was partly to blame for the fact that few businesses have upgraded from XP to Vista, even though Vista has now been on the market for almost two years.

Consumers and enterprises alike also complained about Vista's heavy hardware and memory requirements, and intrusive security measures that added extra steps to even routine computing tasks. Microsoft no longer mentions Vista by name in its latest Windows ads and appears to be accelerating efforts to bring Windows 7 into production.

"With our new approach to planning and development we now have a great foundation for our partners to start learning and innovating on this exciting new version of Windows," said Steven Sinofsky, senior VP for Microsoft's Windows Engineering Group, in a statement.

Software could overshadow gadgets at the upcoming Consumer Electronics Show, with Microsoft expected to shed light on its upcoming Windows 7 OS.

The financial meltdown may also be lingering topic as tech vendors gather to flaunt products at the show in Las Vegas, hoping to show enough glitter and sparkle to bring them better fortunes in the new year. Attendees will pour over the latest technologies, including OLED (organic light-emitting diode) TVs, netbooks, smartphones, media players, and other entertainment devices.

Audiences may miss the show's perennial star, Microsoft Chairman Bill Gates, who gave his final CES speech earlier this year. Instead, Microsoft CEO Steve Ballmer will kick off the event with a keynote address on Jan. 7. He's expected to give a peek at Microsoft's Windows 7 OS, which many hope will be zippier and less resource hungry than Windows Vista.

Microsoft expects to make "significant" Windows 7 announcements, including a possible release of Windows 7 beta software. A "sneak peek" at future Microsoft Office software may also be offered.

A look at Microsoft's future software could add pep to what otherwise might turn out to be a subdued show. Attendance at CES 2009 is expected to drop as consumers and technology vendors cut spending amid the economic crisis. Hotels, which in previous years were often packed months before the show, have been offering discounted rates to fill rooms.

The Consumer Electronics Association insists that pre-registration has been strong and says it's too early to call it a quiet show. Organizers expect 130,000 attendees, said CEA spokeswoman Tara Dunion.

However, that would still be a significant drop from 144,000 attendees at CES 2007.

The prospect of a reduced audience hasn't fazed companies like Intel, Microsoft, Hewlett-Packard, IBM and Dell from showing products in or around the show. Overall, 2,700 companies will be present at various locations, including the Las Vegas Convention Center and surrounding resorts and hotels.

A standout at CES could be netbooks, small laptops used for basic applications such as Web surfing and e-mail. Intel defined the category with its Atom processor, which was then solidified by the success of Asus' Eee PC. The show could see an evolution of netbooks, with features like touch screens attracting interest. Asus will likely show a touch-screen netbook, and Intel is showing off its Convertible Classmate, a netbook with a touch screen that swivels.

Via's elusive Nano processor may also make an appearance. Rumor has it that Samsung will show its NC20 laptop based on a Nano processor.

Some of Intel's competitors, meanwhile, may try to redefine how people think of netbooks by pushing more advanced capabilities. Advanced Micro Devices and Nvidia may talk more about boosting graphics on netbooks. Freescale and Qualcomm could demonstrate netbooks with more communication-savvy chips.

Mundane laptops will also get a makeover. Expect plenty of buzz around a new Sony Vaio laptop, which the company says is "revolutionary" and will change the way users think about the products. It remains unclear if the tiny laptop is a netbook or a full-featured ultraportable. For power users, Lenovo is expected to show the ThinkPad W700DS laptop with two screens -- a first in laptops -- for people who want to perform multiple tasks at the same time.

Rounding off mobility will be smartphones with new operating systems, touchscreens and 3G connectivity. Many mobile phone companies are expected to adopt Google's Android platform, including Samsung, which may show an Android phone at CES.

Struggling smartphone maker Palm is holding a big event to announce its new Linux-based OS code-named Nova, along with new devices. The company hopes to use CES as a springboard to regain prominence in the smart phone market, where it has been eclipsed by Research In Motion and Apple.

Like past CES shows, televisions will grab the imagination of visitors as vendors fight to remain the centerpiece for home entertainment. CES 2008 saw the emergence of OLED screens with prototypes from Sony and Samsung, and CES 2009 could see further progress. In May, Sony CEO Howard Stringer said a 27-inch OLED TV would be coming, which could launch at the show.

Samsung showed a 40-inch OLED high-definition TV prototype in October, and larger screens may be on tap.

Given TV's ease of use, some may prefer these devices for Internet access in the future. With that in mind, some companies are working to merge the Internet and TV. Silicon Image will show its Allio high-definition LCD TV with a built-in PC so users can simultaneously use the TV and Internet through a split screen.

Intel will show prototype products for running mini-applications to complement TV viewing with information from the Internet. For example, widgets will allow TV watchers to talk to friends in real time or buy products advertised on TV from online stores.

The Internet also continues to shape how entertainment is delivered. Streaming media will battle Blu-ray DVD as the way to deliver entertainment and movies to end users. Having conquered HD DVD, Blu-ray still has a hurdle to pass with most players priced above US$150, so expect prices to drop at CES.

Some kinks also need to be worked out to better stream media between entertainment devices, and expect to see some improvements at the show. Tzero will demonstrate devices for wireless HDMI (high-definition multimedia interface) multimedia streaming between devices using ultrawideband (UWB) wireless technology. Tzero's technology enables uninterrupted wireless delivery of high-definition video and surround sound at a rate of 480Mbps over 20 meters, the company claims.

Users may also see progress in data transfers between PCs and devices like digital cameras with improvements in the USB 3.0 specification.

Overall, many other gadgets will be on display to enjoy over the show's four days. CES may end up being more relaxing and intimate with the floors less crowded.

Downloads of a new build of Microsoft Corp.'s upcoming Windows 7 operating system have soared in the past two days, with thousands of systems now pulling pirated copies from BitTorrent sites.

Searches today on the Pirate Bay BitTorrent site, for example, returned multiple listings of Windows 7 Build 7000, which Microsoft identifies as a beta candidate in the file name. The torrent is a disk image of the 32-bit version of Windows 7 Ultimate; a 64-bit version is not yet available.

The most heavily trafficked Windows 7 BitTorrent on Pirate Bay showed more than 4,300 "seeders" — the term for a computer that has a complete copy of the torrent file — and about 7,500 "leechers," or computers that have downloaded only part of the complete torrent. Less popular BitTorrents of the file on Pirate Bay claimed an additional 1,000 seeders and more than 3,000 leechers.

On Saturday, a day after the first copies of Build 7000 appeared on BitTorrent, Pirate Bay's prime listing showed less than half as many seeders as it did today.

Similar increases could be seen on other BitTorrent sites. For example, Mininova listed almost 20 Windows 7 BitTorrents — some of them duplicates of the ones that appeared in searches of Pirate Bay. Two of the torrents on the Mininova site had more than 4,500 seeders each.

Bloggers who have downloaded the pirated operating system — such as ZDNet.com's Ed Bott — are reporting that its end-user licensing agreement labels the new build as the beta that Microsoft has promised it will open to the public in early 2009.

Although Microsoft hasn't specified a release date, information published on its own Web site earlier this month hinted that the beta would become available no later than Jan. 13. And with Microsoft CEO Steve Ballmer slated to deliver a keynote speech Jan. 7 on the evening before the opening of the International CES trade show in Las Vegas, speculation has been brisk that he will not only talk about Windows 7, but possibly also announce the immediate availability of the beta.

Today, however, Microsoft stuck to its earlier vague timetable. "The Windows 7 public beta is still expected in early 2009," a company spokeswoman wrote in an e-mail. She declined to respond to questions about what actions Microsoft would, or could, take against BitTorrent sites that list the pirated build.

Windows 7 is scheduled to ship late next year or in early 2010, according to statements made previously by Microsoft.

According to Microsoft, pre-Beta development milestones of Windows 7 fail to play nice with USB network adapters that rely on pre-Windows Vista drivers. The symptoms involve NDIS 5.x USB network adapters not being displayed in the Windows 7 Performance Monitor. NDIS refers to the Network Driver Interface Specification library, which, following the transition from Windows XP to Windows Vista, evolved to version 6.0. Version 5 of NDIS was used by Windows operating systems before Vista.

“Perfmon only shows adapters that indicate that they have a physical, hardware connector. Windows Vista and Windows Server 2008 introduced a new Network Driver Interface Specification (NDIS) known as NDIS version 6. Network driver developers are encouraged to move their drivers to this new specification,” Microsoft revealed.

The Redmond company does not have an update to resolve the issue, nor does it indicate that it plans a resolve. With not even a workaround made available for Windows 7, Microsoft is only advising users to make sure that the network adapter comes with drivers updated for NDIS version 6. The Redmond company explained that Windows 7 would be aware of all physical connectors as long as they were plugged in via NDIS miniports built especially for NDIS 6. Only in this context would Perfmon be able to display all physical connectors. Fact is that NDIS in Windows 7 comes with limited support for legacy USB Network Adapters, but only limited.

“While NDIS supports NDIS 5 drivers, it does so in a legacy, compatibility layer and does best-effort to determine if the adapter has a physical connector. If the adapter does not have any hardware resources assigned to it, which is the case for USB NICs, NDIS assumes that the NIC does not have a connector. Perfmon, as a result, will not list the NIC as an available network interface,” Microsoft added.

Beta 1 of Windows 7 has been leaked to the Internet, and those who have used it report that some of the more intriguing features of the new operating system, including the new taskbar, are finally in place.

Note that I haven't actually gotten my hands on the beta yet; I'll be giving it a full review in the coming weeks. Instead, I've checked out reviews from numerous sites such as Paul Thurrot's.

Most of what appears to be new is under the hood, including some performance improvements. But some of the new interface improvements seem to be put in place, including the following:

New Taskbar

The taskbar at the bottom of the screen now functions somewhat like Mac OS X's Dock. Large application icons on the taskbar launch programs when clicked on. You can customize which application live there. In addition, when you run applications, they run in the taskbar as well.

So far, the new taskbar has drawn some fire, with some reviewers complaining that it confuses icons for launching applications with icons for applications that are currently running.

Jump List

Mouse over an application on the taskbar or Most Recently Used list on the Start Menu, and a context-sensitive menu appears specific to that application, such as opening a previously opened file in Microsoft Word.

Aero Peek

Hover your mouse on an area on the right side of the taskbar and you'll see a list of what is on your desktop, as well as previewing any open window.

Apart from these changes, it appears as if not much is new. But as soon as I get my hands on a copy, I'll report on details.