On Friday, the company also cracked down on fraudulent use of its Office 2007, forcing users to prove they own a genuine copy of the software before being able to access Microsoft support and add-ons.

Last week, unidentified sources at Taiwan PC makers were told by Microsoft that the RTM, or release to manufacturing, version of the OS had been pushed back to the second week of November from the initial schedule of the fourth week of October, according to a report at Taipei-based DigiTimes.

The initial RTM build 5824 was said to have unexpected bugs, which could halt an upgraded Windows XP OS for Vista.

Microsoft had since come up with an improved RTM build 5840, as a follow-on from 5824, that is still being tested, said the reported sources.

Previously, Microsoft had reduced the number of bugs found in beta versions of the software from 1,450 to around 500, according to the sources.

A Microsoft spokesperson on Friday declined to comment on the reported RTM delay.

Microsoft has not publicly confirmed a date for Windows Vista RTM, said the spokesperson. The company has internal target dates, but we do not provide specific dates for milestones.

Microsoft is currently in the final stages of development of the OS, which has already been delayed several times, and is on track for Vista business availability in November and general availability in January 2007, according to the company spokesperson.

However, if the RTM release is delayed much longer, it may be tough for Microsoft to meet its end-of-November deadline.

Another potential concern for Microsoft business users is the company’s Vista client licensing policy, which enables them to transfer an OS license just once. For IT departments that rebuild PCs frequently, this may mean they will have to buy a new Vista license every time.

A separate Microsoft spokesperson said the hardware tolerance of product activation for Vista had been improved and is more flexible than for Windows XP.

Specifically, Microsoft has built in an algorithm that compares the hardware components from the initial configuration against changes that have been made. This help assess whether the software is installed on the same device, said the spokesperson.

Validation will fail if the software detects a substantially different hardware configuration, he said. At that point, the customer is able to use the one reassignment for the new device. If, after using its one reassignment right, a customer again exceeds the tolerance for updated components, the customer can purchase an additional license or seek remediation through Microsoft’s support services.

In other words, if the same machine is dramatically reconfigured more than once, a new Vista license will likely be required.

Of course, Windows Vista Business and Ultimate customers can install their Vista copy either on a physical or virtual machine, but if they want to do it on both they should purchase two licenses or Vista Enterprise Edition, said the spokesperson.

A single Enterprise Edition license includes the right to install one copy on the physical machine, plus up to four times in a virtual machine on the same device for the same user.

Separately, Microsoft on Friday made validation mandatory of downloads of Office Online templates from its Office System 2007. The so-called Office Genuine Advantage program was first launched as a voluntary service in April so that companies and users could check they were using only bona fide copies of the software.

Now users must prove they are using a non-pirated version of Office before they can download new templates and get support from the software giant.

Come January, all users will also have to pass an authentication test in order to use Office Update. That means users of software that is not proved to be 100% legal will not get Office updates and add-ons from Microsoft.

Microsoft would continue to provide a complimentary copy of Microsoft Office to help qualifying customers who unknowingly acquired counterfeit versions of Microsoft Office 2003, according to a company statement.

However, users will be required to fill out a counterfeit report, provide proof of purchase and send in their counterfeit CDs to qualify for the free Office replacement.