ASUS in bed with Microsoft? The new XP-based EeePC 900 will actually be cheaper than the Linux-based version.

Asus will sell the Windows XP model of its Eee PC 900 for a substantially cheaper price than its Linux counterpart, raising questions about the company's long term commitment to the Linux marketplace.

At a Sydney launch event for the much-anticipated Eee PC 900 model, local product manager Albert Liang revealed that the XP model would sell for $599 in Australia, while the Linux model would be $649. To cover the licence cost associated with Windows XP Home and Microsoft Works — which replace a custom version of the Xandros Linux distribution and OpenOffice — the XP model has just 12GB of storage, while the Linux version has 20GB.

The machines, which sport a wider 8.9 inch screen and weigh in at just under a kilogram, will go on sale in Australia at the end of May. Adding to the impression that Linux is now the poor cousin, the XP version will be sold through "selected retailers" while the Linux machine will be available through "computer resellers". (Translation: No more Linux machines in Myer.)

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