Sources very close to Intel's mobile group have confirmed that Microsoft has agreed to keep Windows XP alive at least until 2010 and probably beyond.

Microsoft was specific about its plans that after Windows XP for netbooks: Windows 7, probably some cut down version, will be the operating system for netbooks. Since this is a great market opportunity for Microsoft, they will simply go after it and release Windows 7 for netbooks. This might be some base version of the “normal” Windows 7, or a special OEM version, we still are not aware of these details.

Intel has already reached an agreement with Microsoft to keep Windows XP alive until 2010 and beyond, as Vista allegedly is not match made in heaven for Netbooks. Vista is too performance greedy, and since Atom is great on low power but has many normal features cut down, Vista doesn’t like it particularly well.

We are sure Windows 7 will like Atom better.