Microsoft plans to ship all available versions of its forthcoming Windows Vista operating system on a single disc.

"The edition of Windows Vista that the customer chooses will then be activated by the product key," Mike Burk, public relations manager for Windows Marketing Communications, said in an emailed statement.

"For instance, if a customer buys Windows Vista Home Premium from a retail store, the full version of Windows Vista will be included on the DVD.

"But because the customer chose and paid for Home Premium, the product key he or she receives will activate the Home Premium edition and its features and functionality."

Windows Anytime Update lets users purchase updates online. After downloading a digital key, the user inserts the original DVD to install additional software components. Microsoft declined to comment on pricing for the upgrades.

Users currently looking to upgrade their systems from Windows XP Home Edition to Windows XP Pro have to completely reinstall the software.

Rob Enderle, principal analyst with the Enderle Group, told vnunet.com that Microsoft is expected to share the upgrade revenues with system manufacturers. He based his comments on conversations with OEMs.

The upgrade feature will be especially beneficial to small and medium-sized firms which often purchase systems with the consumer version of Windows XP and later realise that they require the additional features in XP Pro, Enderle said.

The benefits are less obvious for the consumer market because the premium versions of Windows Vista require an advanced graphics card to power the 'Glass' graphics.

While this could drive sales of video cards, there is no historical precedent that could indicate whether consumers will actually do so. Instead of updating their operating systems, consumers could also opt to upgrade their entire system, Enderle suggested.

The cheapest version of Windows Vista is Home Basic which will sell at $199. The top-of-the-range consumer Ultimate Edition is priced at $399. Upgrade versions for existing Windows XP users will be available at discounted rates.