According to a post on Ina Fried's Beyond Binary blog at CNET's News.com, Microsoft now permits the Home Basic and Home Premium editions of Windows Vista to run as guest operating systems using virtualization software such as Parallels Desktop or VMware Fusion. Previously, only the Business and Ultimate editions, which cost more, could be run in virtual machines without violating Microsoft's EULA (end-user license agreement). In June 2007, Microsoft had claimed they would relax their EULA in this way, only to reverse themselves within days and say they were sticking with the original license terms after all. Since it has been more than a week since this latest announcement, I suspect it will remain in effect for good this time.

The revised licensing terms are good news for people who want to run Windows on their Macs without spending extra money for features they don't need; it will also undoubtedly lead to more sales of Windows Vista for Microsoft. However, the only change that occurred was on paper (or on screen, as the case may be). There was never any technical reason one couldn't run Vista Home in a virtual machine, and neither Vista itself nor the virtualization programs had to be altered in any way to support the new policy. So it could be that Microsoft simply chose to alter their license to legalize what was already happening widely.