Microsoft's Distinguished Engineer Eric Traut, the person behind the development of core virtual machine technologies, including Virtual PC and Virtual Server, showed off Microsoft's next-generation Windows 7 version which takes up a mere 25MB of disk space. 

The internal version code-named "MinWin" was shown off during a presentation at the University of Illinois last week.  MinWin is a very small kernel that will one day be part of all Windows operating systems.

"A lot of people think of Windows as this really large, bloated operating system, and that may be a fair characterization, I have to admit," Traut said.  "But at its core, the kernel, and the components that make up the very core of the operating system, is actually pretty streamlined."

As an example, Windows Vista is about 4GB on disk, while MinWin is about 25MB right now, and is hoping to shrink down even further.  Additionally, Vista typically needs at least 1GB of memory to run efficiently, while MinWin was demonstrated on just 40MB of RAM.

Traut said that MinWin is still in the developmental stage, but that Microsoft is committed to this approach.  The upcoming release of Windows Server 2008 will showcase similar technology with its Server Core approach.