The Microsoft Product Team Blog is discussing one of the Vista Service Pack 1 (SP1) prerequisite updates, the Servicing Stack Update (SSU) — KB937287 — which contains the SP1 installation program.

“Back in February, we posted about the release of a couple of prerequisites for Windows Vista Service Pack 1. While several million customers installed the updates successfully, you may have read that a few customers experienced an endless reboot cycle while installing one of the prerequisites: KB937287 …”

As posted last month on the Windows Vista blog, we suspended automatic distribution of the SSU while we investigated the problem. Over the past few weeks, we’ve learned a lot more about the problem and have taken steps to address the issue. Today, we’d like to let you know that we are resuming automatic distribution of the SSU tomorrow and provide more clarity on what happened. To clear up any concerns for those of you who have already installed the update: There is no problem with the files that make up the Servicing Stack Update (KB937287); the problem some customers encountered was with the installation process for the update.

If you have downloaded this update, you may like to read the whole article.

I would normally ignore such questions. But when the reply comes from as knowledgeable a source as Joe Wilcox over the eWeek’s Microsoft Watch I take notice.

Joe takes us through the computer history of his friend, a bookseller who loves Microsoft — until now :

Only the newness of the Vista computer and my friend’s confidence in Microsoft have kept him from moving full-time back to the XP system. He wants to believe. But like me, his faith stopped with Vista SP1. He didn’t have confidence to install the update without me around, and I would want to back up everything first. There has been too much trouble surrounding SP1.

I haven’t updated my wife’s laptop, either. A few weeks back, one of the two SP1 prerequisite updates fatally wounded the boot-up process. System Restore rolled back the update and revived Vista.

I have to say I’ve not had as much trouble with my system as either Joe Wilcox or his friend. But then I haven’t been given the option of SP1 yet.

Food for thought.

As was always on the cards, Yahoo has rejected Microsoft’s $44.6 billion offer for the company, holding out for an even bigger bid or a white knight partner.

It seems that the Windows and Office software giant may be prepared to increase its offer, but not by enough to satisfy the Yahoo board, which believes the company is worth far more.

However, a further rejection could lead to a hostile takeover battle which Yahoo may find difficult to fight.

Microsoft is gambling that buying Yahoo would transform both companies’ attempts to overhaul Google in search and advertising, the new gold rush on the internet. Its unsolicited offer represents a 62pc premium over the internet company’s recent share price.

However, in a Friday counter-response, Google’s Chief Executive Eric Schmidt called Yahoo CEO Jerry Yang to offer help to stall Microsoft’s bid.

Yahoo is believed to be looking at other ways to survive this “unsolicited bear-hug”, including the emergence of a rival bidder or a business tie-up with Google that will allow it to remain independent.

The Wall Street Journal reports, “No serious alternative bids have emerged, and antitrust experts say Google’s latitude to do even a business deal with Yahoo is minimal because of likely regulatory concerns. At Microsoft, optimism is growing that the $31-a-share offer for Yahoo that it made public Friday will go through in the absence of rival bids …”

There could be a long way to go yet.

According to Ed Bott over at ZNet the case for Windows Vista Service Pack 1 just got a lot stronger.

“When SP1 ships sometime in early 2008, it will strip away one of Vista’s most annoying features and remove one of the most persistent objections to Vista’s adoption.”

Microsoft will remove the reduced functionality mode — the so-called “kill switch” — from the operating system, “restoring the Windows Genuine Advantage (WGA) program to its original role as a series of persistent but nonlethal notifications”.

WGA senior product manager Alex Kochis talking to reporters and analysts, said, “Based on customer feedback, we will not reduce user functionality on systems determined to be non-genuine”.

With SP1 installed, a Windows Vista system that fails validation, which Microsoft terms “non genuine”, will continue to work exactly as before, except for some minor annoyances. The desktop background will be black. If you change it, a scheduled task will paint it black again one hour later, and you’ll see a small “Activate Now” alert in the same location, which apparently you can ignore.

Sounds hairy, though.