The planned Windows 7 SKUs, with the two Microsoft plans to emphasize in bold:

• Starter Edition, emerging markets and netbooks (pre-installed by OEMs only)


• Home Basic, emerging markets only


• Home Premium, a main SKU with Media Center


• Professional, business features for non-enterprise licensees, i.e., home users


• Enterprise, volume licensees


• Ultimate, business features for consumers

Foley also reports that people who want to skip Vista and go directly from Windows XP to Windows 7 will be offered unspecified upgrade pricing. Doing this will require a clean installation.

Update, 10:54 a.m.: Microsoft is releasing more details, attributed to Mike Ybarra, a Windows general manager:

Editions of Windows 7 are meant to be a superset of one another. "... [A]s customers upgrade from one version to the next, they keep all features and functionality from the previous edition. As an example, some business customers using Windows Vista Business wanted the Media Center functionality that is in Windows Vista Home Premium but didn't receive it in Business edition."

Microsoft expects the Home Premium and Professional SKUs to "meet most customers' needs." Veghte told Foley Microsoft expects more than 80 percent of people to use those SKUs.

Update, 11:56 a.m.: Added a link and rearrange the order the SKUs are listed so the "superset" model makes more sense. (Previously had Home Basic after Home Premium.)