US District Judge Marsha Pechman gave the go-ahead for class action status on 22 February.
The case hinges on whether Microsoft advertised systems as certified 'Vista Capable' with the intention of holding up Christmas PC sales ahead of the delayed launch of Windows Vista in January 2007.
"These common issues ... are whether Vista Home Basic can fairly be called 'Vista' and whether Microsoft's 'Windows Vista Capable' marketing campaign inflated demand for 'Windows Vista Capable' PCs," wrote Judge Pechman, according to the Seattle Post-Intelligencer.
The lawsuit stems from the advertising of some computers with 512Mb of Ram and DirectX9 as 'Vista Capable' which could only run the most stripped down version of the operating system without the Aero interface and some media player functions.
The plaintiffs argue that this removes key features of Vista and that those features that could be run were being given away free with Windows XP.
They also point to emails from senior management at Microsoft showing unease with the marketing campaign.
Mike Nash, corporate vice president for Windows product management, wrote in an email: "I personally got burnt. Are we seeing this from a lot of customers? I now have a $2,100 email machine."
Jim Allchin, then co-president of Microsoft's Platforms and Services Division, wrote in another email: "We really botched this. You guys have to do a better job with our customers."
Retailers such as Wal-Mart also expressed concern at the time that the strategy could backfire.
The 'Vista Capable' campaign started in April 2006 and ran until the launch of the operating system in January the following year.
Microsoft said that the information on the capabilities of the machines was available on its website, and that it was up to customers to make sure they were buying the right system for them.
Microsoft spokesman Jack Evans said in a statement: "We are currently reviewing the court's ruling.
"We believe the facts will show that Microsoft offered different versions of Windows Vista, including Windows Vista Home Basic, to meet the varied needs of our customers purchasing computers at different price points."
The granting of class action status opens the case beyond the two plaintiffs to anyone who bought a 'Vista Capable' computer.
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