Microsoft previewed its new Windows operating system for personal computers, Windows 7, with a typically bullish performance by its chief executive Steve Ballmer at the Consumer Electronics Show in Las Vegas.

He announced the public release of the latest test version of the software, which is expected to be released fully within a year.

Windows 7 is the latest update of the software system that more than 1 billion people around the world use on their computers to interact with the internet, at work and at home.

The release of the public beta version comes at a crucial time for the company, which has lost its reputation for innovation to other tech companies such as Apple. Windows 7 supersedes Vista, the much-derided system which, since its launch in January 2007, has been criticised over its stability, and security and privacy features.

Mr Ballmer said that Windows 7 is designed to make everyday tasks faster and easier and had been designed after closely incorporating consumer feedback. Reviews of test releases of the new operating system generally agree it is much faster than earlier versions.

"I believe Windows will remain at the center of people's technological solar system," Ballmer said. "We're putting in all the right

ingredients: simplicity, reliability and speed, and we're working hard to get it right and to get it ready."

Microsoft said Windows 7 would deliver fundamental performance, reliability and security features. It is said to be compatible with the same hardware, applications and device drivers as Windows Vista, removing a fear that users would have to pay out to upgrade all their kit to run Windows 7.

Mr Ballmer said new features in Windows 7 would also help protect privacy and data and make it easier to keep a PC running smoothly, and enable quicker recovery from problems, a key gripe in the past.

Windows 7 would also have improved navigation, a new taskbar and a streamlined user interface designed to put commonly used resources within easy reach, it was said.

But there was no word on how much businesses and individuals might pay to upgrade to Windows 7. There had been reports that Microsoft would lessen the pain for corporate customers and users by offering discounts or even free upgrades.

Microsoft's announcement is an attempt to replace Vista, a critical and commercial failiure, with as little fuss as possible. "Vista has been, to all intents and purposes a flop," said Richard Holway, Chairman of Tech Market View, the industry analysts. "Vista would effectively 'kill' any machine that wasn't state of the art, making it run very slowly." In contrast, Microsoft claim Windows 7 will take up a lot less memory, and so will work more efficiently.

The general public will be able to download a test version of Windows 7 from January 9.

Mr Ballmer also talked up a new multi-touch feature of the operating system. The company believes the new version of the software could revolutionise the way computers are used, paving the way for touchscreen monitors in every home. People will be able to do simple tasks such as selecting a folder without using a mouse, and write on the screen with a stylus or finger.

Critics said that it was unlikely office workers or home users are unlikely to abandon hard-won typing skills to lean forward to poke and prod their monitor instead.

UK Head of Windows John Curran admitted that "some things will continue to lend themselves to keyboard and mouse," but that "touch has some advantages in how you can design and manipulate something. What we're trying to do is innovate."

Microsoft said sharing data across all PCs and devices will be easier with a new feature called Device Stage. More significantly, Windows 7 is designed to integrate with Windows 7 Mobile and Live Wave 3, because Microsoft wants to synchronise users' offline and online lives through its software.

There will also be a new version of Microsoft Office on the way, which will allow people to work on the same document from multiple locations.

Mr Ballmer emphasised how Microsoft's products would help connect up people's information, applications and devices in revolutionary ways.

The world's largest software maker also announced deals to make its Live Search programs the default search engines on more personal computers and mobile phones.

For years, the opening keynote at CES belonged to Microsoft Chairman Bill Gates. Mr Gates passed the mantle on when he stepped down from day-to-day operations at Microsoft last summer, and this speech marked Mr Ballmer's first time making the high-profile address.

"It feels like we've entered a period of reduced expectations, a time when we may be tempted to temper our optimism and scale back our ambitions," Mr Ballmer said, repeating that Microsoft would continue to invest in research and development. "But no matter what happens with the economy or how long this recession lasts, I believe our digital lives will only continue to get richer."

Microsoft hopes is to boost the number of people using Microsoft's Live Search engine, which ranks well behind Google and Yahoo!, through a deal with PC maker Dell. Dell will put a special Live Search browser toolbar and Windows Live programs, including Microsoft's e-mail and instant-messaging applications, on most of the consumer and small-business PCs that it sells worldwide. That deal replaces a relationship between Dell and Google.

Among the other highlights from Redmond, Washington-based Microsoft: The company added Flash support — required for watching YouTube videos — to its cell phone version of Internet Explorer. And it created a link between Facebook and its own Windows Live social network, so when people update their status message or upload photos on one site, that information appears on the other.

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