Back in April 2007, a lawsuit was filed in the US District Court accusing Microsoft of unfairly and incorrectly labeling machines as "Windows Vista Capable." The PCs with the small sticker on them (pictured below) could indeed run Vista, but they only performed well with the most bare-bones edition: Vista Home Basic. In other words, there would be no Aero Glass, no Flip3D, no Media Center–no features that Vista was and is widely advertised to offer. Many customers felt like the company had ripped them off. Microsoft argued that it provided detailed information on the sticker program and that it was the customers' fault for not educating themselves before purchasing their new computers.

At a hearing before U.S. District Judge Marsha Pechman in Seattle on Friday, lawyers debated whether the lawsuit should be expanded into a class action. During their presentation, the plaintiffs' lawyers made much of the fact that some internal Microsoft e-mails voiced the doubts of senior-level Microsoft employees over the program's viability.

The goal of Microsoft's campaign was to maintain sales of Windows XP computers during the 2006 holiday shopping season after Windows Vista was delayed to January. The idea was to reassure customers that the XP machines they were purchasing could run Vista when it came out. But the company's marketing campaign also used the phrase "Premium Ready" to indicate when a computer was able to run more than just the Home Basic edition. Soon after the suit was filed, the company attempted to clarify what exactly it meant by "Windows Vista Capable" and how it differed from "Premium Ready." The fact that it had to do this just showed how confusing the whole situation had become, and it was bad enough that even top Microsoft executives apparently got burned.

While the contents of the internal Microsoft e-mails remain sealed, Seattle Post-Intelligencer reporter Joseph Tartakoff attended the hearing and recorded some of them.

Mike Nash, currently a corporate vice president for Windows product management, wrote in an e-mail, "I PERSONALLY got burnt. ... Are we seeing this from a lot of customers? ... I now have a $2,100 e-mail machine." Jim Allchin, then the co-president of Microsoft's Platforms and Services Division, wrote in another e-mail, "We really botched this. ... You guys have to do a better job with our customers."

Microsoft downplayed the quotes. "The e-mails cited in today's hearing are isolated, and in many instances, outdated and really just snippets of a broad and thorough review that took place during the development of the Windows Vista Capable program," a Microsoft spokesperson said in a statement. "Throughout this review, Microsoft employees raised concerns and addressed issues with the aim of making this program better for our partners and more valuable for consumers. In the end, we believe we achieved both objectives."

During the presentation, Microsoft's attorneys argued against granting the case class-action status. since each customer who bought a "Windows Vista Capable" computer had different information at the time of the purchase. Plaintiffs' attorney Jeffrey Thomas countered that all such individuals were united in that "each person in our class did not get what they paid for."

During his presentation, Stephen Rummage, a lawyer with Davis Wright Tremaine who represented Microsoft, argued that the case did not merit class-action status, citing the uniqueness of the time-of-purchase data of each customer buying a "Windows Vista Capable" PC.

One thing is certain: the choice to have many editions of Vista differentiated sometimes by key features is causing Microsoft quite a bit of trouble. Had Microsoft enabled or disabled features like Aero Glass based on a machine's capabilities rather than the version of the OS in use, this suit would have likely been avoided.

U.S. District Judge Marsha Pechman is expected to rule on the class-action status in about a week.