The new OS made a surprise appearance that’s got everyone talking.

While Apple is known for stealing the show and anticipation has been building at a giddy pace for the new 3G iPhone, its long time rival Microsoft is not afraid to steal a bit of spotlight of its own. After months of tight-lipped silence, even as recently as last week, about Window’s Vista’s successor Window 7 which is set to debut in 2009, Microsoft finally unveiled the work in progress to the press.

The place was Carlsbad, California at the sixth edition of the D Conference, known only as D6. Julie Larson-Green, Microsoft’s VP of Windows Experience Program Management gave a tantalizing brief demonstration of the new OS, which is showcasing strong support for the touch technology. Steve Ballmer downplayed the demo as the “smallest snippet of Windows 7″, but the crowd obviously knew the significance of the event.

The new OS was demonstrated on the Dell Latitude XT, a current model notebook with touch screen capabilities. Julie said that touching is “super important” to the new interface. And she knows what the customer wants. She made a name for herself at Microsoft when she delivered the well received 2007 Microsoft Office UI, which featured marked improvements over past implementations both in style and feel.

“You will be able to do these things in Windows 7,” Julie commented as she drew a picture in Microsoft Paint using only her fingers. Further, she showcased how the system can accept multiple finger inputs, hence the “multi” part of the “multi-touch” technology title. The new multi-touch technology will deploy on “all sizes and shapes of computers” according to Julie, but you would need the appropriate digitizer hardware. Touching is “not complete replacement of the mouse”, rather it’s a way to further your experience, she says.

[....read more at Dailytech....]