Windows Vista customers can now receive the first service pack for the operating system via the Microsoft Automatic Update service, Microsoft said Wednesday.

Windows Vista Service Pack 1 will download automatically to PCs that have the automatic update feature of the OS turned on, the company said. Previously, Vista SP1 was available to customers via Windows Update, but people had to specifically download it.

Not all customers will receive SP1 immediately via Automatic Update, however. The company is distributing it in phases to "ensure a seamless download experience," Microsoft said. A timeline for when all customers would receive Vista SP1 via Automatic Update was not immediately available.

The Windows client team has been pushing out service packs, a new feature pack, and Ultimate Extra add-ons for Vista over the past few days–to varying degrees of customer satisfaction.

On April 23, Microsoft began rolling out via its Automatic Update mechanism SP1 for Windows Vista. According to a posting on the Windows Vista Team Blog by Windows Client Communications Team Director Chris Flores:

"Over the next few months Microsoft will automatically distribute Windows Vista SP1 to PCs that have automatic updates turned on and running English, French, German, Spanish, or Japanese via Windows Update. Automatic distribution will only occur, according to user settings, on PCs ready for SP1. After Windows Vista SP1 downloads, WU will let you know that new updates are available. You’ll then be asked to make a few clicks before the installation of SP1 will begin."

Microsoft is prepared to walk away from its $43.6 billion bid for Yahoo if the two sides can’t agree on a price, Chief Executive Steve Ballmer said on Wednesday.

Speaking at a technology conference near Milan, Ballmer said Yahoo’s better-than-expected first-quarter results, reported on Tuesday, have not changed Microsoft’s view of Yahoo’s value.

Microsoft took the wraps off Live Mesh on April 22, just ahead of the service’s official debut at the Web 2.0 Expo this week. Live Mesh is an ambitious initiative–a combination of a platform and a service–and one that’s been more than two years in the making, according to company officials.

What, exactly, is Live Mesh and what do developers, customers and partners need to know about it? Here are 10 things you should know about Live Mesh.

Playing catch-up in the on-demand customer relationship management market, Microsoft announced the general availability of Microsoft Dynamics CRM Online with aggressive pricing and data storage options that seek to take business away from Salesforce.com.

Dynamics CRM Online is a full suite of on-demand sales, marketing and customer service applications along with business process automation and workflow automation, said Bill Patterson, Microsoft’s director of product management for the online CRM package.

BrowserPlus could be Yahoo’s answer to Google’s Gears, which offers offline access for users traveling or plagued by poor Internet connections.

While the financial experts wait on tenterhooks to learn how the Yahoo-Microsoft bid will shake out and how the Internet company will fare in its quarterly earnings announcement April 22, Yahoo’s programmers continue to crank out new software.

BrowserPlus is the latest tool to slip into beta from the company’s secretive Brickhouse incubator unit, according to Googler Dion Almaer’s Ajaxian.

Microsoft will hold firm on its $43.2 billion offer for Yahoo, regardless of whether Yahoo’s quarterly results impress or disappoint investors, Chief Executive Steve Ballmer said on Tuesday.

"We think we can accelerate our strategy by buying Yahoo and will pay what makes sense for our shareholders," Ballmer said. "I wish Yahoo all the success with its results but it doesn’t affect the value of Yahoo to Microsoft."

Ballmer, speaking at the launch of Microsoft’s Web portal for North Africa, MSN Maghreb, has set a Saturday deadline for Yahoo’s board to accept a deal with Microsoft or face a lower bid that it takes directly to Yahoo’s shareholders.

With a day to go before a critical Pennsylvania Democratic primary, Barack Obama’s team has been busy patching security holes.

According to Netcraft, a hacker exploited security flaws in Obama’s site to redirect traffic to Hillary Clinton’s site. Anyone that visited Obama’s community blogs section of the site was sent to Clinton.

In a blog posting this week, Alex Brown, leader of the International Organization for Standardization (ISO) group in charge of maintaining the Office Open XML (OOXML) standard, revealed that Microsoft Office 2007 documents do not meet the latest specifications of the ISO OOXML draft standard.

"Word documents generated by today’s version of Microsoft Office 2007 do not conform to ISO/IEC 29500," said Brown in a blog post recounting the process of testing a document against the "strict" and "transitional" schema defined in the standard.

Microsoft Office 2007 saves files in OOXML, an XML-based format, which has been offered for standardization through the Ecma industry body to the ISO. Since a vote narrowly accepted OOXML as a draft international standard, ISO is now in control of the specification.

PhatNotes for Outlook 5.2 for Windows Mobile Classic, Standard and Professional edition is now available. This version of PhatNotes features the ability to configure the software’s "context analyzer" directly on the mobile device – enabling users to adjust their settings while on-the-go. The Context Analyzer feature allows users to access websites, send emails, make phone calls, or even open files or execute applications just by tapping on words that are recognized as website URLs, email addresses, phone numbers, or a custom command.

PhatNotes for Outlook 5.2 is compatible with Windows Mobile 2003 or later, Windows 2000 or later, and Outlook 2002 or later. It is a free update for users of PhatNotes for Outlook 5.1.