Only a non-story if you believe ultra cheap PCs will continue to have limited capabilities. This is Microsoft's way of insuring that the low-cost machines remain limited enough to where the price of Windows doesn't make the system significantly more expensive for the consumer than Linux. Luckily, the cat is already out of the bag to some degree...the Eee PC has been quite successful in its Linux incarnation.
It's interesting that the limited specs don't mention RAM or processor speed, and don't rule out solid-state drives. A small screen and 40-80 GB storage could be a pretty sweet machine, with or without a touchscreen -- the price for these laptops could just as easily drop to $99, where the cost of Windows is a serious problem, or rocket up to $800, adding wild custom hardware and tweaking the OS significantly to accommodate it. This looks like a move that could have a ton of unintended consequences.
Besides limits on the screens and hard drives, to be eligible, the systems can have no more than 1G byte of RAM and a single-core processor running at no more than 1GHz.
