This won't make things cozier between Intel (INTC) and Microsoft: The chip giant is showing off a new version of its Moblin operating system, a Linux-based OS for netbooks. If it gets any traction on netbooks -- the PC industry's biggest growth segment -- that could be bad news for Microsoft's dominant Windows.

WSJ: Moblin v2.0, designed for use with an Intel chip called Atom, comes with a distinctive interface called M-zone that's designed to help users play digital media, use the Internet and engage in social networking.

Partners such as Novell Inc., which will help adapt and sell Moblin, say the easy-to-use software could help Linux finally expand beyond a tiny niche in the PC market. "For users who are looking for an alternative to Windows, it's disruptive," said Guy Lunardi, whose title at Novell is director of client preloads.

While Linux-based netbooks have been on the market for years, and Google (GOOG) will supposedly power some netbooks with its Android operating system, Microsoft's (MSFT) Windows XP is currently the dominant netbook OS.

If Microsoft can make a decent, low-cost version of its forthcoming Windows 7 for netbooks, there's no reason to think that'll change any time soon. People are familiar with Windows, and people like to use what they're familiar with.

But if someone like Intel or Google can make an excellent Linux-based operating system with a great feature set and user interface -- that's significantly cheaper for netbook makers to use as the basis of their devices -- that could disrupt Microsoft longer-term.

Or, of course, Apple could steal the show and make today's netbooks look like Rio MP3 players.