By Katie Marsal

Published: 06:45 PM EST

The last test version of Windows 7 has reached a wide audience and is now believed on track for a late October release, putting Microsoft's last cards on the table as it prepares to square off against Mac OS X Snow Leopard.

As part of a staggered launch that will see the public get the release on May 5th, Microsoft early on Thursday morning published the release candidate for Windows 7 to those in its developer network. The Redmond, Wash.-based software developer says reflects the feedback and tweaks made to the operating system since its public beta was released nearly three months ago.

Compared to the earlier preview version, the candidate is a surprise as it has multiple new features added late into development. Among the more notable changes are a remote streaming service that Windows 7 PCs share music or videos over the Internet as well as a beta, optional Windows XP Mode that lets owners of Windows 7 Professional and Ultimate run Windows XP apps in a hidden Virtual PC emulation environment -- not unlike the Classic mode that has been available to run Mac OS 9 software in most versions of Mac OS X, or the pseudo-native mode used by apps like Parallels Desktop and VMware Fusion.

Those who've used the beta will also notice changes to basic interface features: Aero Peek, a feature which lets you see active apps' windows just by mousing over their taskbar icons, is now also invoked when using the traditional task switcher. It further handles many open app windows more gracefully in the taskbar and provides more (and more advanced) JumpLists, or (for those more familiar with them in Mac OS X) context-sensitive menus for taskbar icons. For the few users currently running Windows 7 on tablets and other touchscreen PCs, more features are also explicitly controllable through touch rather than reverting to a trackpad or keys.



Unlike with Windows Vista and earlier pre-release versions of Windows, Microsoft doesn't plan to deliver a second release candidate. The OS giant has said since late in 2008 that its next public step after the release candidate will be the final version, also known as the release-to-manufacturing (RTM) build. Publicly, the company has always been hesitant to provide a date and has always insisted that Windows 7 would be ready about three years after Windows Vista hit stores, or early 2010 -- though the presence of a release candidate with seven months left in 2009 has already cast doubts on this estimate.

A PC maker, however, may well have undermined what has been increasingly evident is an attempt to push Windows 7 to completion for the holiday shopping season. Acer told UK site Pocket-lint on Thursday that Microsoft will ship Windows 7 on October 23rd and that a new Acer all-in-one PC will be one of the first systems to allow the Windows 7 option when it becomes available. A Microsoft-run trade-up program will give customers an incentive to buy PCs within the 30 days before the release.



While the news puts Windows 7 on shelves months ahead of schedule, the advance release isn't surprising to most observers. Microsoft has found itself under attack from both corporate buyers actively shunning Vista's lack of compatibility -- a key motivator behind XP Mode in Windows 7 -- as well as continued pressure from Apple and even itself. The company has been sufficiently frightened by recent increases in Mac market share to launch a concerted negative ad campaign attempting to portray Macs as too expensive, and has seen its Windows revenue eroded by a necessary but unprofitable move to continue selling Windows XP for netbooks.

In its latest quarterly report, Microsoft reported a 6 percent year-over-year drop in total revenue; it's a relatively small amount, but the first the company had registered in over 23 years and one the company said would be turned around by Windows 7.

As such, the release candidate is an important part of a public relations strategy to improve Windows' image that Microsoft knows is particularly time-sensitive -- both for its own bottom line as well as a race against the clock to avoid giving Apple's Mac OS X Snow Leopard, which itself is gaining late feature additions, enough lead time to tempt customers away from Windows.