Microsoft demonstrated its next consumer operating system, Windows Me, at an event this weekend, one week after a landmark antitrust ruling against the software giant.

Also being shown was Pocket PC, the company's new version of Windows CE for handheld PCs, and Front Page 2000 Web authoring software. For the first time, Microsoft showed to the public the third and last version of Windows 98. Changes under the hood focus on four main areas: PC health, digital media, home networking and improved online experience. The OS is designed to simplify previously complicated tasks such as installing peripherals and solving system crashes. The company has also taken several steps to address the gap between the operating system and new consumer technologies that have emerged since the last release, especially in digital media. "What they're trying to do is strongly differentiate this product from Windows 2000. Microsoft clearly does not want business users to use this product," said Gartner Group analyst Michael Gartenberg. While consumers should see improvements, small- or home-business users may not benefit from the new OS because Microsoft has removed support for some corporate networking technologies available in Windows 95 and Windows 98. Windows Me is set to be released in the second half of this year, both as an upgrade and loaded on new computers. Microsoft next week will ship the third beta, or test version, of the OS to beta users.