Few people really noticed it, but Microsoft yesterday made a formal announcement for a new version of Windows CE, designed for "embedded" applications. (To learn more about using Windows CE features, consider buying this book.)

In the World of Always-On, however, this is big stuff.

It's big stuff because Always-On applications will be essentially hardware. They will run in the background. Their output will be in the form of real-time warnings, or actions. Most clients, and many servers, in this world will need and use only the embedded version of an operating system.

While Microsoft dominates desktops, it does not dominate the embedded world at all, although it would like to. Various forms of Linux have a big place here, and there remain a host of specialty operating systems, like VXWorks, that grew up in the world of consumer electronics.

The new release provides built-in support for an dual-mode mobile phones, which can also run on 802.11 networks, as well as Voice Over IP. In fact, the announcement is being timed to the Voice on the Net trade show in Santa Clara on Wednesday.

But the main theme is bringing Windows CE "closer to desktop parity," with things like built-in error-reporting, and a wide range of security features turned on by default.

The key question remains whether hardware developers will write to Windows, or whether Linux will lengthen its lead. Embedded Linux vendors are tenacious, and they have a price advantage. Microsoft's chief hope is that, as mobile devices become part of the computing mainstream over the next year, developers will find they need a mainstream computer operating system.