First Peek At Windows 98

By Michael Krantz and Declan McCullagh

WINDOWS 98

State attorneys general may sue to keep Microsoft from shipping the new operating system to PC makers in May. But if the A.G.s relent, or fail in court, and you get the chance to upgrade (at $109 a pop), what to expect? Win 98 is a clear step up from Win 95, but it's an evolution, not a revolution.

EXPLORER 4.0

Whether Internet Explorer is "integrated" into Windows 95, and thus permitted under the 1995 consent decree between Microsoft and the Feds, has yet to be decided. Clearly, though, IE 4 is an integral part of Win 98, which lets you browse your own hard drive the same way you would the Web. For the record: yes, you can install Netscape Navigator on Win 98 machines, and even run IE and Navigator simultaneously. But IE launches much faster than Navigator, and so far at least, Microsoft won't let PC makers replace the Explorer icon with Navigator's. Gates' critics call this his typical recalcitrance and hope Justice or the states scuttle the Win 98 launch.

INVISIBLE ENHANCEMENTS

The most important changes in the new OS are the hidden upgrades under the hood. Win 98 learns which files you use most often and sorts your hard drive to open them more quickly. Another trick cuts down wasted memory, speeding programs you're working with and freeing space for those running in the background.

MULTIMEDIA

Bill Gates wants to turn your PC into a full-purpose multimedia box. Win 98 users who shell out $100 for a TV add-in card can tune in to all the browser-based WebTV content Hollywood can produce--if Microsoft can persuade Hollywood to produce it. Also key: a new DVD driver that should make gaming hotter than ever.

WINDOWS NT

Win 98 is the end of one line. Future Microsoft PC operating systems will be based on Windows NT, the OS first designed for business machines. NT, a more efficient and secure product, marks the company's long-overdue break from the antediluvian MS-DOS. It will also supposedly run most current Windows programs. It had better.

CHANNEL BAR

To Microsoft, it's a simple menu guiding surfers to popular sites like Disney and CNN. To Redmond's critics, it's an abuse of monopoly power. The Active Channel Bar "decreases consumer choice," the Software Publishers Association told the Justice Department. In response, Microsoft said PC makers could sell copies of Win 98 with the channel bar hidden. That wasn't enough for SPA president Ken Wasch, who says, "The channel bar should be completely empty," so anyone other than Microsoft can fill it.

THE BAD NEWS

We did find a few things to complain about. The once standard fax utility, for instance, has vanished, though if you already have Microsoft Fax on your machine, you'll still be able to use it. And although most pre-Win 98 applications will work fine, old versions of disk utilities like Norton Antivirus will require upgrades. Games like Activision's Heavy Gear that use Win 95 movie features also might not work properly. (Microsoft says early bugs have been fixed; we'll see.) Then there's Win 98's gluttonous appetite for hard-drive space: if you upgrade, be prepared to surrender around 70 megabytes. But for serious PC users, that's a small price to pay to keep pace with the ever improving Windows. Hey, these days it's almost as good as a Mac.

--By Michael Krantz and Declan McCullagh