Microsoft Corp. last night confirmed that portions of the source code for two versions of its Windows operating system have leaked onto the Internet, a security breach that could give hackers important intelligence about how to exploit flaws in software run by many of the world's computers.

A leak of any portion "could dramatically increase the probability that new zero-day vulnerabilities will be found," said Alan Paller, director of research at the SANS Institute, a security training group based in Bethesda.

Thor Larholm, senior security researcher at Newport Beach, Calif.-based PivX Solutions, said the Windows source code file being traded on the Internet appears to be roughly 660 megabytes in size, about one CD-ROM's worth of data. That is far short of the estimated 40 gigabytes of data that make up the entire Windows code.

The problem starts when users receive an instant message that appears to come from someone on their Buddy List (a list of friends and co-workers who also use the AOL Instant Messenger service). The message reads "check this out" and includes a link that contains a reference to "osama capture.php."

If users click on the link, a program that is supposedly a game asks permission to be downloaded and installed onto their computers. Installing the game gives the company that produces it -- purportedly, an outfit called PSD Tools -- permission to display ads on the users' computers. In addition, the software spreads the "fun links" to everyone on the users' Buddy Lists.

"While many who have installed it are describing the game as a virus, the truth is that by neglecting to read the terms of service included with the game, they have given the program's distributors permission to take over their computers," said Matty Janko, a systems administrator whose 23-computer network was invaded by the game Wednesday.

The U.S. District Court in Seattle ruled Wednesday that the jury in the case should "consider whether the Windows mark was generic" before Windows 1.0 entered the marketplace in 1985. It also said that even if the "primary significance" of the term is not generic today--that is, has been displaced by the proprietary use--the trademark is not necessarily valid.

Daniel Harris, Lindows' lead trial counsel, said in a statement that the win was a major blow to Microsoft. "The court's ruling confirms that a company, no matter how much money it spends, cannot buy a word out of the English language. These repeated filings by Microsoft are just another attempt to deplete our resources by dragging these legal proceedings on for as long as possible."

Microsoft, which hopes to ban the company from using its Windows-spoofing name, has had some court rulings go in its favor. For example, the Benelux injunction forced Lindows to stop selling or advertising its products, cancel all outstanding orders and stop users in the Netherlands, Luxembourg and Belgium from accessing its site.

In an email interview with BusinessWeek, open source hero Linus Torvalds describes how he went back to check the code he wrote a dozen years ago and which SCO claims is its copyright.

"For some of the files they claim copyright ownership on I went back 12 years in the archives to see their original form, and the fact is, I was a young guy at university in '91, and I [made] mistakes that I simply wouldn't [make] anymore, and that are clear signs of beginner [programming]. And those mistakes show how the code wasn't copied," he told the mag.

"Basically," he says, "SCO's arguments are just too wrong to even discuss rationally. He adds: "They're a cornered rat, and quite frankly, I think they have rabies to boot. I'd rather not get too close to them."

SCO has written a letter to politicos in Washington DC which alleges that Linux threatens the US economy, technological innovation, its grip over the global software industry and last, but surely not least, "our national security".

Some believe, says Darl McBride, for it is he who has taken pen to paper, that the GNU General Public Licence is in direct contradiction to US copyright law, and to the Digital Millennium Copyright Act.

But Open Source software, says Darl, "has the potential to provide our nation's enemies or potential enemies with computing capabilities that are restricted by law".

He said: "Someone could build a supercomputer for military applications... but a computer expert in North Korea who has a number of computers... could, in short order, build a virtual supercomputer".

As Eolas Technologies moved a step closer to sliding half a billion or so US dollars into its back pocket, courtesy of its so-far successful patent infringement case against Microsoft, reports emerge of company founder Michael Doyle having friendly chats with the "Linux community".

Mr Doyle is one of the named inventors on U.S. Patent, number 5,838,906, a "distributed hypermedia method for automatically invoking external application providing interaction and display of embedded objects within a hypermedia document."

EWeek reports that Doyle told them he has been: "in discussions with major players in Linux world and working on plan to resolve '906 patent issue with entire Linux community." Any solution, Doyle added, "Will be supportive of open-source community."

Once Mr Doyle has the half-a-bill firmly wedged in his back pocket, he'll do a deal to allow open sourcers to use the technology freely, we imagine. And, sticking with our imagination, it seems Doyle, conscious of his public image, wants to be seen as a Robin Hood figure, redistributing, by legal means, the massive wealth accumulated through the Sheriff of Redmond's Windows tax.

I avoided the big story of the last week or so concerning the fact that many image manipulation programs, including Photoshop, were now including technology that's only purpose was to stop people from scanning images of major currencies. However, this latest article on the topic brings up two interesting points. First, and most importantly, the system they're using is so weak, that just about everyone has figured out a way around it. This is just like many copy-protection systems found on entertainment offerings.

The other disturbing part about this revelation is that Adobe admits that they don't even know how the blocking software works. They were given the code by by the Central Bank Counterfeit Deterrence Group without details on how it works or what it really does. In other words, the software could do a lot more than blocking images of currency.

It's not just Adobe that has implemented the blocking of currency note scanning, it appears.

A reader tells the INQUIRER that, curious about the restriction on copying banknotes, he attempted to scan in a £5 note using a TWAIN source and Paint Shop Pro version 8.

This suggests that many of the most recent updates to software have implemented a voluntary restriction on scanning money.

A visitor to the Adobe Photoshop-for-Windows Forum (registration required to post, can log in as guest) has described a curious 'feature' with Photoshop 8 (also known as 'CS'). Seems this latest version of Adobe's flagship product has the built-in ability to detect that an image is of American currency. Something has been built into Photoshop's core coding that can detect something in images of currency and will prevent the user from opening the file. Apparently it will also do this with Euro notes; info on other currency is pending. According to other online reports, the latest version of Paint Shop Pro has similar restrictions, also known about since late last year.

Microsoft has begun the new year with a Linux knocking publicity campaign under the slogan "Get the Facts." A series of advertisements is due to run for six months in major IT publications, and will direct readers to the company's landing page for the campaign.

There you will find a long list of what we presume are expensively produced case studies, and a substantially shorter list of "independent analyses" which "prove" a variety of things (e.g. Windows cheaper than Websphere, .NET cheaper than J2EE/Linux), but which have already been widely circulated, and frequently fairly widely doubted.

And really, Microsoft's problem is not that people think Linux is cheaper than Windows (apart from them being well aware that Linux is free and Windows isn't, that is), but that Microsoft's customers are in general pretty convinced that Windows is more expensive than it should be.