Live coverage of Bill Gates CES keynote

6:25pm We're kicking back in the Engadget VIP balcony at the Hilton. Paul is on the keys, Ryan on camera. We've just gotten the warning that things are about to start.

6:34 Still waiting!

6:36 The thumpy music is getting louder and the big-screen graphics busier, so we must be close.

6:37 Ladies and gentlemen .... Gary Shapiro, president of the Consumer Electronics Association. He's giving us the stats on the show. IT'S REALLY BIG!

6:42 The intro just keeps going. Now there's a video about Microsoft's vision. See the comments to this post for links to live video streams.

6:44 Ladies and gentlemen ... Bill Gates!

Bill is glad to be named Person of the Year along with Melinda and Bono. But he remembers when the PC got the award in 1982. Mostly straight quotes from Bill from here on ...

"We've talked about this as the decade of digital lifestyle, the decade of digital workstyle. It's not just one application that makes it happen. It's the fact that as you adopt these things, they really go together.

"I thought I'd start off and show a scenario that we think will be real in the next four years.

(demo of home panel touch screen with family pictures, calendars, a map)

"The family has decided to share their location with the other members of the family, so we're able to track that. Here we've got some news that picks the items that are of interest to us. There's a storm here that's interrupting the supply chain of a lot of companies including mine. I touch the clip to say I'd like to track that video on my way to work, so it's transferred to my cellphone as I go to work.

"At work .. instead of using a password I use my fingerprint. I see a lot of information including that news item I've been tracking. We set up a conference call of people who are tracking this issue. Here's the article annoted to see how it affects us.

"On my tablet ... what I'd like to do is select a chart and move it to my desktop or drag it into this video conference. It was actually created, I see, by Thomas Anderson, so I'm interested in bringing him into the conference...

"Toward the end of the day I get notice that I need to leave earlier for the airport to make my flight ...

"When I get to the airport, I put my phone down on this table, and now I have my full desktop. I put this business card on the table. It sees it and recognizes it. I've got a little note I made during the conversation. I can see the information being downloade to my phone ... added to my contact list.

(Bill gets a press release flashed to the screen for his fingerprinted approval)

"As I work, the screen knows exactly how much time I have to work before I have to leave .... It's a very simple thing to have all these devices connected. The phone is very different; the idea of meetings is very different ... that's because we've taken software and put it at the center. We see that in so many areas. I think five or six years ago if you'd said software would be so important in making phone calls, music, photos, TV better.... this really is a symptom of the great progress we have here in the digital decade.

(AT THIS POINT BILL IS REHASHING STUFF YOU ALREADY KNOW - SOFTWARE WILL LET US DO MORE AND CONNECT PEOPLE ETC ETC)

"It only catches up to us in the way it changes the way entertainment gets done .. TV where we pick the news segments we want. We find the video that wouldn't have been available in a broadcast system. A huge component of this is the investment we've made in the Windows platform.

(BILL IS GOING TO SHOW THE DIFFERENCE BETWEEN THE "2-FOOT INTERFACE," AKA PC, AND THE "TEN-FOOT INTERFACE" IN THE LIVING ROOM)

DEMO: WINDOWS VISTA. Aaron Woodman from Microsoft takes over.

"QuickTabs. Tabbed browsing with a twist." LIVE PREVIEWS OF DIFFERENT TABS. HEAVY USE OF TRANSPARENCIES AND MOTION IN THE INTERFACE.

PARENTAL CONTROLS ON GAMES. "As a parent, you can decide if you're comfortable with your child playing that game on that PC."

TALKING POINTS ALERT: Aaron has used the phrase "putting consumers back in control" a good half dozen times in the past ten minutes.

Once nice touch: Vista never loses the original copy of a photo, video, or whatever that you've edited. Years later you can go back and get it. (Yes, we know our iPhoto does that.)

Bill is coming back with Van Toffler from MTV to talk about what they're doing. A new venture, URGE, between MTV and Microsoft. Van puts up a "separated at birth" photo of Bill and Napoleon Dynamite.

Van: "URGE will offer a customized relationship to music, a sense of musical discovery ... over 100 radio stations .. a chance to learn about the roots of songs and lyrics ... a chance to interact with the artists. You can make URGE the soundtrack to your own event. It will be programmed by music fans for music fans. Subscribers will tell us what sucks. We will engage an army of music professionals, bloggers, musicians, etc ... Take note, we are trying something new with URGE, like Music Television was twenty years ago. And it certainly needed improvement -- can you say Flock of Seagulls five times a day?" (Hey, we still play FoS on the iPod)

Justin Timberlake track is interrupted by J-Tim himself walking onstage. "Urge offers artists like myself a new way to reach music fans with a ton of options to play, interact with, and buy music. When my new album is released this year ... URGE and I will be doing some new and creative things together. Thank you for having me, pleasure to be here."

Gates back on the mic:

"We've wanted to get tablet capability down to the mainstream of tablet PCs. Gateway is making a tablet at very much a mainstream price. It will be a simple decision to say yes, I want to get that on-tablet capability. Vista ... adjusts automatically to your handwriting style, so over time it gets better and better. Consuming it onscreen instead of on paper becomes better. Driving that to the mainstream is something we're very committed to.

"Another thing we're committed to is Windows Mobile .. 93 operators in 55 countries ...

"This one you've probably heard about - it's our partnership with Palm. This phone is amazing for single-hand operation. Based on the experience they had, they brought that to the Windows Mobile platform. This is on sale, starting tomorrow, ahead of schedule. They got approval from Verizion (EV-DO). Any sort of attachments, images, will be fantastic because of the bandwidth." Apparently the 700w ships tomorrow, according to Gates. Hmm!

"We'll have more devices coming out this year. One from Motorola is called the Q.

(Now Bill is showing a home VoIP phone. You can scroll through your buddy list and call them.)

7:30 "Let's now talk about TV. TV is a big activity and one where we see software really surprising people with what it can do. ... An individualized video stream ... ads can be target to you ... something that you won't want to skip over. As you get into a news show, the subjects you care about, you can get more info, and skip over others. You might have a ski resort you want to see every time you want to sit down to watch the nightly news whenever you want.

"It completely blows open the limitations that channels used to create. It becomes something easy for you to navigate and find. Not one TV here, and your Internet TV there. Personalization, choice, all these things that weren't possible. Last year we had very successful trials .. AT&T and Verizon are rolling out commercial deployments. This year these will scale up to really large numbers, and people will see it blows away the previous video platform.

"As that video comes into the home it will be viewable on ... every screen in the house. That's where Media Center comes in. That's the other special version of Windows, in addition to the tablet. We have 6.5 million copies out, but we're not stopping there.

"One of the partnerships that's going to be very important is our partnership with Intel. You're going to see another great example of this with VIIV. It rhymes with five and live. You're going to see a lot of information about breaktrhough technology that Intel enables -- 7.1 surround sound right on the chip, the dual core processor enabling that.

(Bill announces that DirectTV content will be available on Windows Media portable devices. A huge screen of media logos -- sky, Yahoo, NPR, Kodak....)

7:35 Joe Belfiore comes out to give a 15-minute Windows Media demo. First up: The Daily Show, as part of something called the Comedy Central Mother Lode. You can catch up on old episodes, see previews.

"Now I want to talk a little bit about hardware innovation. This is a PC from Averatec. It's very small, very light, runs Windows Media Center, has all the remote contols built in, with or without a tuner built in.

"Our idea was to create an experience that viewers could enjoy from the couch, or take with them on a portable device. This is the Toshiba Gigabeat. It has a 30G hard drive. You get about 4 hours of video playback time on the battery. (it's a Windows Portable Media Center with a widescreen mode)

"This is the movie Hitch, that we just purchased from the newly announced Starz Vongo service.

"Whether you get your content from broadcast and record it, or download it from the Internet, or created it yourself you have flexability...

"This is a new LG Electronics portable media center device. The thing about it is the killer widescreen format."

The demo of Windows Live is hard to describe in words. But we like the optional IM interface, and hey -- Joe's a Galactica fan.

Joe plays The Bourne Supremacy and shows how he can pop up transparent menus over the video to, for example, get a list of recent actors in the scene. He gets a quick bio of Franke Potente. "Everyone in the family isn't angry at me because I stopped the movie," and the content is up to date because it's online. Another demo shows a popup talking head of the producer explaining the scene.

Another demo: Managed copies. He can make a full disc image, or an HD copy or a portable movie file from a DVD.

"Now I'd like to talk about Windows ability to receive digital cable natively."

He slides a cable card into a PC card slot. "Today with a Media CEnter PC you have an analog connection or you can recieve digital content over the air. You can't get high-def just by plugging a cable in. You can't get ESPN or Showtime etc. All that will change. Attach the cable, slide in the access card," and you can even get premium content. Demo of Windows Vista Media Center playing The Aviator HDTV that 'has never left the digital form"

"Now I'm going to wrap up by giving you a look at the revised interface." Lots of transparencies and moving interfaces that take advantage of the HD pixel space.

7:55 Peter Moore -- Mister Xbox 360 -- comes on to talk about gaming.

"It's five years ago today, from this very stage, that we used CES to unveil Xbox. We envisioned a community connected through Xbox Live.

"Halo 2 recorded the greatest day in retail with 122 million dollars in sales in one day. We were the thought leader.

"Fast forward to Xbox 360. We're moving from thought leaders to market leaders.

"I'm pleased to announce that Xbox achieved an unprecendented global launch.

(We'll skip to the bottom line: They've added another manufacturer to try to keep up with demand, and everyone's jumping on the content bandwagon. You guys know this stuff.)

HERE's THE NEWS: An Xbox 360 external HD DVD drive is coming this year!

Al Bernstein comes on to talk about Fight Night Round 3. He brings out Bill G and Steve Ballmer to play Ali vs Frazier. We're chanting "Developers! Developers! Developers!" from the balcony, but truth be told Ballmer has an amazing amount of physical energy. It's impressive to see a guy that big bounce on his toes and shadow-box at Bill. "I've been training THIRTY YEARS for this!" But he lets Bill win the game anyway.

8:10 Bill alone onstage again. "We've seen a lot tonight, and I think a few themes stand out." 1) High Definition. 2) Partners. 3) "This all has to work across these devices. It's got to be user-centric. Software is providing power, but software has got to provide simplicity. Security, privacy, speech recognition .... all of this will fold into this platform."

"We're all going to have a lot of fun using these systems. Thank you."

8:12 The guy behind us: "That was the longest keynote EVER."