Microsoft will take a big step into online retailing Tuesday when for the first time it will sell a program both as a download and in shrink-wrapped boxes in stores.

The new, $19.95 Plus Digital Media Edition for Windows XP (www.microsoft.com/plus) will also mark the first time Microsoft has required "product activation" in a downloadable program. Activation, first introduced to most consumers in Windows XP itself, is an anti-piracy system that ties a purchased copy of a program to a single machine.

A lot of users didn't like product activation in Windows XP -- if the computer has been modified enough, the activation software can think XP has been reinstalled on a new machine, requiring a call to Microsoft to unlock the software -- and using the technique to stop people from putting a $20 application on a second PC may annoy customers even more.

The Plus pack is an add-on intended to enhance Windows XP's multimedia capabilities. For example, a "photo story" tool creates dynamic slide shows, zooming in and out and panning left and right on each photo. The program then squeezes the files to a size practical for online posting. A sound-recording tool can transfer music from vinyl records and cassette tapes into Microsoft's Windows Media Audio format. There's also a "Sync & Go" function that synchronizes Web content with Pocket PC handheld organizers, including material from CBS MarketWatch, MSNBC.com and Warner Music Group.

Source: NeoWin