Microsoft today dropped a limitation from Windows 7 Starter, the edition expected to ship on most netbooks, that would have blocked users from running more than three applications at the same time.

"It's been rumored all week," said Michael Cherry, an analyst with Directions on Microsoft. "I think it just makes sense. They've gotten the performance of Windows 7 on netbooks pretty good, and it was only going to cause confusion for people if they'd kept the [three-application] limit."

In an entry to a company blog, Microsoft spokesman Brandon LeBlanc announced the change. "Based on the feedback we've received from partners and customers asking us to enable a richer small notebook PC experience with Windows 7 Starter ... we are going to enable Windows 7 Starter customers the ability to run as many applications simultaneously as they would like, instead of being constricted to the 3-application limit that the previous Starter editions," LeBlanc said.

Earlier editions of Windows XP Starter and Windows Vista Starter, both of which were sold only in a small number of markets outside the U.S., came with the three-app restriction.

Microsoft was roundly criticized by bloggers last month after the Wall Street Journal ran a story about the artificial limitations it was planning for Windows 7 Starter. One Computerworld blogger called it the "worst marketing moves for an upcoming operating system I can ever recall, while another officially dubbed Starter "crippleware."

Unlike Windows XP's and Vista's entry-level edition, Windows 7 Starter will be available to computer makers worldwide, including those selling within the U.S.

But even as Microsoft dropped the application limitation from Windows 7 Starter, it confirmed that the version would lack a host of features that higher-priced editions will include. For one, Starter does not offer the Vista-esque "Aero" graphical user interface; instead, it will use what Microsoft called a "Windows Basic" theme that resembles XP.

Also missing from Starter, said LeBlanc, is DVD playback; multi-monitor support; personalization tools that let users change the desktop wallpaper, colors and sound themes; the Windows Media Center software for watching recorded TV or other content; and domain support.

The low-end edition also lacks Windows XP Mode, the virtualized environment for running older applications. XP Mode will be offered only to customers running Windows 7 Professional, Ultimate and Enterprise, the three top-priced editions.

Cherry saw the change as more evidence that Microsoft was trying to avoid the mistakes it made with Windows Vista. "They're really doing everything they can to remove any barrier to the OS," said Cherry. "And by removing these barriers, they really are working to make as smooth a transition as possible into Windows 7."

Report from the usually-reliable Web site TechARP.com say Microsoft has set other restrictions on Windows 7 Starter that apply only to computer makers. Earlier in the week, TechARP.com said Microsoft will allow OEMs to install Starter only on PCs with screens no larger than 10.2 inches that run a low-powered single-core processor.

That move, another analyst said today, was prompted by Microsoft desire to limit damage to its revenue stream by forcing the low-priced Starter edition into a narrowly-defined category so that more powerful machines with larger screens would be required to run more-expensive editions.

Today's change to Windows 7 Starter reinforces Microsoft's position as the maker of the default netbook operating system, said Cherry. "They didn't want to get into a situation where they gave Linux an opportunity to get back into consideration," he said.

Microsoft has not set a ship date for Windows 7, but has said it's on track to have the new OS on store shelves in time for the 2009 holiday sales season.