Microsoft is preparing a $3 OS designed to run on low-cost hardware sold in developing nations. The package includes a stripped-down version of XP, MS Office Home and Student edition, and a few other apps for the kids. This should run of hardware like the One Laptop Per Child project’s XO laptop. The software will be sold only to governments.

But wait? Won’t the OLPC run Linux? And isn’t Linux free? Is Microsoft trying to vat-grow an army of Microsoft users and still turn a tidy profit on invisible bits? Yes, yes, and double yes.

Microsoft aims to double PC base [BBC via Wired]