Yes, this is the one, the one they call Windows 7. It’s supposed to be the operating system to replace Vista in three years (or less). Microsoft has supposedly learned from its mistakes with Vista and will position Windows 7 for consumers directly, offering a point-release update of Vista for business users right up to 7’s launch.

These are the rumors, but some blog pundits wonder if there’s a deliberate seed-planting effort going on by Microsoft (indeed, here’ an insider talking about it). But Mary Jo Foley doesn’t think so — she thinks Microsoft really wants to keep a lid on it. It’s just harder to do that and still get developers to test builds.

Sources on Neowin.net indicate that Windows 7 should be finished in the second half of 2009, three years after Windows Vista. Highlights include imitations of Mac OS X features such as network-aware connections that detect which network you’re in and switch your settings and devices accordingly, and (with a Live account) the ability to carry your Internet Explorer settings and favorites with you. Screen shots on rumor blogs are almost identical to Windows Vista with only minor changes. One is a new gadget called “Windows Media Center” that displays whatever is playing on your WMC.

Now that Bill Gates has left the building, will Microsoft continue to be as big a threat to innovation as it was in the past? Certainly not with as much wit. Microsoft will very likely acquire technologies to keep competitive with the emerging software-as-a-service (SaaS) platforms. And count on Windows 7 to be locked into Microsoft’s online services. Windows Live has taken ownership of most of the service-connected features in Windows, including Mail, Messenger, and Photo Gallery. You can expect to see a Windows Live release in the same time-frame as Windows 7 that makes the “Windows + Windows Live” combination a marketing hit — and a potential Trojan horse for deeply integrated capabilities that lock consumers into the Microsoft world. If that world includes all of Yahoo’s services, well, that makes sense to Redmond, doesn’t it?

Care to stick with Vista and wait for the Oz-like world of Windows 7? Good luck with that.