By Matt Lake

The release of Windows 7 to manufacturing [1] begins a tale of two operating systems: the one you want and the one you don’t. It is packed with improvements and cool stuff, but it still carries a whiff of Vista that may put XP diehards off. That said, people who have gotten used to Vista will enjoy the fact that Windows 7 looks the same but acts a whole lot better.

Like many people who compute both at home and at work, I use XP and Vista as well as Mac OS X Leopard, and I like elements of all three. So I’ve been watching the beta and RC versions of Windows 7 very closely. Does the final “release to manufacturing” (RTM) code [2] — the same code that will ship with new PCs and retail versions of Windows 7 in October — merit a jump from any of my current platforms?

[ Related: “Windows 7 RTM arrives: The time is finally ripe for a Windows upgrade [3].” | Preparing for Windows 7? Get the overview you need in the Windows 7 PDF Report [4] from InfoWorld’s J. Peter Bruzzese. | Can your PCs run Windows 7? Find out with the compatibility checker in InfoWorld’s free Windows Sentinel monitoring tool [5]. ]

Well, yes and no.

Little features like the ability to burn CDs from single ISO image files are great — I don’t need to install third-party tools to create CD-Rs anymore. And Windows 7 definitely boots up faster than XP or Vista on identically configured machines. You can’t knock the advantage of 60 seconds less boot time.

But grrr! Just when things were going well, I tried to do a little light video editing, only to discover that Windows Movie Maker isn’t included with Windows 7. It’s now part of Microsoft Live, and it’s still in beta. In its present form, it’s much less capable than the app that ships with XP. So after 10 minutes with Windows 7, I found myself booting up an old XP machine for an everyday task.

(I later discovered that there is a downloadable version of MovieMaker [6] that works with Windows 7, although Microsoft’s download page [7] doesn’t list Windows 7 among the supported OSes. Nevertheless, it’s not nearly as elegant as having it included with the OS.)

What other joys and disappointments does the new Windows bring?

Finding stuff is easier…
Keeping track of your work is always going to be a chore. Fortunately, Windows 7 concentrates much of its efforts on making files accessible. Windows 7 clusters different file types into shortcuts called Libraries — they look like Vista’s Documents, Pictures and Videos folders, but they lead to files of the pertinent type, whatever folder they are actually located in. You can add your own folders to Libraries at will to keep your project files accessible.

Then there are Jump Lists, a zippier way of previewing your open applications and folders. Moving a mouse over the taskbar pops up easy-to-scan lists of open windows, and right-clicking on them shows not only what’s running, but a brief history of what you’ve done with those programs — files opened, sites visited, and other handy pointers. That feature alone has the makings of a much more efficient workday.

And Windows 7’s Search is streets ahead of earlier iterations: Like Mac OS X’s Spotlight, it begins delivering results as you type — before you’ve even finished a word — and narrows the list as you enter more characters. You can also preview the contents of search results before deciding to open them.

Chalk up several productivity pluses for Windows 7.

…but it’s just as tough to find the right version of the OS
When Windows Vista was released, one of the loudest complaints was about the overwhelming array of versions it came in. And while XP didn’t initially ship with quite as many flavors, later additions such as the Media Center, Tablet PC, and Professional x64 editions upped its version count as well. Despite pleas from pundits to reduce the number of versions [8] available for Windows 7, however, things haven’t gotten any simpler.

There’s a Starter Edition for netbooks, two Home versions (Home Basic and Home Premium), plus a Professional, an Enterprise and an Ultimate edition. (There has been some confusion about whether there will be different versions for the European Union to comply with EU regulations; the latest from Microsoft appears to be that the EU will receive the same versions [9] as elsewhere.) And, of course, most of these are available in both full versions and lower-priced upgrade versions for people with licensed retail copies of Windows 2000, XP, or Vista.

Where do you start with a choice like that? Fortunately, most individuals and small businesses can knock off a few options right away: The Enterprise edition is available only to large corporations, Home Basic will be sold only in “emerging markets,” and the Starter edition will be sold only with netbooks. But that still leaves three editions to choose from in the U.S.

I’ve been using the beta and early release candidates of the top-end Ultimate version for months now, but it’s pricey ($320 for the full version; $220 for the upgrade). If I’m not prepared to spend that much when I come to plop down my dollars, which of the two scaled-down versions will best fit my needs? I’m still trying to figure that one out.

And even after you settle on an edition, you’re not done making decisions yet. All packaged retail versions of Windows 7 come with both 32- and 64-bit versions of the OS, so you’ll have to choose which one to install. The 64-bit question isn’t easy even if you have a 64-bit CPU: While 64-bit computing promises better data handling and more speed, the “con” list for installing 64-bit operating systems includes not knowing whether 32-bit drivers will work at all, and whether some 32-bit applications may actually run more slowly in a 64-bit environment.

It looks better…
Yes, this is relatively frivolous as reasons go, but you can’t knock the psychological boost you get from a good redecorating job. Windows 7 themes [10] make your workplace fresh again. They let you cycle through different background images and screensavers, and enable you to build your own desktop themes and share them with others.

Windows 7 also fixes a half-cooked Vista feature: Gadgets, those handy little desktop tools modeled after Mac Widgets that include clocks, weather tickers, and up-to-the-minute headlines. But Vista docked Gadgets in a horrible sidebar that took up too much desktop space. Windows 7 gets it right: You can slide your clock to the top left, tuck your weather ticker halfway down the right … in short, stick them where you want them.

…but it’s not necessarily faster
It has been reported widely that Windows 7 is faster than ever [11], in part because of its ability to take advantage of multicore and multithreaded chips [12] and GPUs. I’m not disputing any of that, but I did experience a little disappointment when upgrading one of my XP machines.

Oh, Windows 7 boots up much faster than XP on my spiffy year-old Toshiba Satellite Pro S300M notebook, but it’s no speedier than XP in daily use. (Adobe’s chronically slow-loading Creative Suite apps, for example, aren’t any sprightlier under Windows 7 — or could they possibly be a little slower? Hard to say.) This is a good notebook with a 2.26GHz Intel Core 2 Duo CPU and 2GB of RAM, but Windows 7’s evaluation of hardware components, the Windows Experience Index [13], gave it a pitiful score of just 3.1 out of a possible 7.9.

The culprit? The graphics subsystem, based on Intel’s Mobile 45 Express chipset, isn’t good enough for the Aero interface. The exact same Windows Experience Index gives a much more generous 4.9 rating on the same system for 3D business graphics and light gaming. It’s the pretty transparent title bars and animations that Windows 7 inherited from Vista that pull all the processing power from the graphics subsystem. And that’s bad news for cheaper computers with onboard video subsystems.

Back when I got Vista, the first tweak I performed was to turn Aero off. Guess what? I had to do the same with Windows 7. And that’s a shame: Is the first thing you want to do with an upgrade to turn bits of it off so you can win back some performance?

It’s not as prissy as Vista…
Just try to run any installation software, browser add-on, or off-the-beaten-track program in Vista: The screen fades out for a second, then fades back in with an “ARE YOU SURE YOU WANT TO DO THIS?” warning. Yes, it’s the the notorious User Account Control (UAC) dialog box. This behavior is downright annoying — all those prompts led to what’s known as “click fatigue [14],” and many Vista users chose to disable UAC altogether [15], defeating the purpose of the security feature.

Fortunately, Windows 7 is a lot less invasive with its security warnings by default, and you can turn off notifications you don’t like without losing all protection against system threats.

…but XP buffs still have to relearn everything
For XP users, Windows 7 is a radical interface departure. Like Vista, it tries to be more Mac-like. The much-vaunted Device Stage [16], for instance, takes things like cameras and scanners out of My Computer (now just called Computer) and puts them into a folder named Devices and Printers.

That’s not a major relearn, but the scanner interface is. XP’s basic but familiar Scanner and Camera Wizard is gone. While the old XP Wizard let you give your series of scanned pages a name you recognized — such as TPS-Report (1).jpg, TPS-Report (2).jpg, and so on — the Windows 7 scanning tool drops files into a folder named after the date, with an optional tag (e.g., TPS-Reports 2009-07-30), and names them Image.jpg, Image (2).jpg, and so on. And you have to relaunch the Windows 7 scanner for each new page — no Wizard-style Back button here.

Changes like these throughout the OS may mean that Windows 7 is too different to make a transition easy for people who are comfortable with XP. For Vista folks, though, it looks the same but acts better — so it’s a natural upgrade for them.

Windows 7 networks like a Hollywood pro…
For a guy who helps maintain an Exchange-based network at the office, my home network is a disgrace. But Windows 7’s HomeGroup [17] could change all that. This Control Panel creates a workgroup with shared files and hardware much more quickly than any Microsoft operating system I’ve ever worked with.

But — and this is a big but — HomeGroups are homogenous collectives. Only Windows 7 machines need apply for membership. So if HomeGroup is the killer application for your Windows 7 upgrade, you gotta get more than one copy to make it work.

That said, Windows 7 is still easier and more efficient at networking in general — from handling multiple Wi-Fi hotspots to setting up on my domain-based Exchange network — than XP was and a worthy successor to Vista. In short, Windows 7 is one slick glad-hander of a networking animal.

…but Microsoft is keeping XP as a stand-in
Even though Microsoft officially cut off XP more than a year ago [18], saying it could no longer be sold preinstalled on new computers, the company has issued a series of reprieves[19] for sales of the aging OS. Dell and other computer makers have also taken advantage of a loophole that allowed Vista Business and Ultimate versions to be downgraded to XP Professional [20], an option that has proven very popular with new PC buyers [21].

With Windows 7 close to shipping, Microsoft is still hedging its bets a little. Microsoft’s enterprise licensing will allow businesses that buy PCs through early 2011 to downgrade Windows 7 [22] (which will come preinstalled) to Windows XP. When enterprises have figured out how to migrate to Windows 7, they can catch up later.

For people who can’t get an enterprise license, Microsoft will also provide XP Mode [23] — a full updated version of Windows XP Service Pack 3 that runs in a virtual machine in Windows 7 — which is available as a separate download to Windows 7 Professional and Ultimate users.

All of which makes me wonder, “If Microsoft isn’t letting go of XP, why should I?”

Bottom line
Even after extensive testing of the various pre-release versions of Windows 7, I still don’t know whether its virtues outweigh its pain points overall. For Vista users, upgrading to Windows 7 is a no-brainer; the new OS handily fixes the worst of Vista’s mistakes. My advice to them: upgrade early and often.

For XP users, however, it’s not so clear. You’ll be getting some nifty and useful new features, but you’ll also be giving up the way you’ve been used to working for the past several years.

Windows 7 may be a far, far better upgrade than Vista ever was before, but in the end, you have to answer this honestly: Is this the best of times or the worst of times to take on an unfamiliar interface? Only you can answer that question.