We’re in the not-as-crowded-as-usual ballroom at the Venetian where the first Microsoft (NSDQ: MSFT) keynote completely sans Bill Gates (well, he got a mention and some applause) is underway with Steve Ballmer on the stage. It only took a couple of minutes for a light-hearted jab at Yahoo’s Jerry Yang, with a fake message asking: “Why do you keep ignoring my friend requests in Facebook?” No mention of the latest funky Yahoo deal rumor, of course,

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Ballmer’s real mission tonight is to outline his vision for Microsoft and to pitch Windows as the once and future software that will connect devices, platforms and people—and the PC as THE computer. “In many ways, connecting all of this together is the last mile. ... The linchpin for bringing all of this together for you should be Windows.”

—Windows 7: “I am really pleased with the progress on Windows 7…. We’re working hard to get it right more quickly.” It should boot more quickly, take less battery life, incorporate touch. “We are releasing the beta of Windows 7; Tech Net and MSDN tonight.” Friday, the beta will be available globally for any user to try. Hasta la vista, baby.

—Three announcements: Windows Live Essentials is being released in final version globally; users can now connect Facebook with Windows Live; Windows Live Essentials and Search will be pre-installed on all Dells.

—Windows 7 demo: A quick demo showing some of the intuitive changes for Windows 7—comparing websites, cleaning desktop clutter, etc. Now the demonstrator is promising nirvana—a new home network wizard that allegedly can set up a working network in less than five minutes. (I will believe this when I can do it myself. Too many of these have failed to deliver.) Media sharing and streaming looks simpler; again, the proof will be in the home streaming.  Looking at Windows 7 for Mobile—Flash is built right in—take that, iPhone.  The mobile photo software looks like an improvement, including instant photo sharing. One me-tooish aspect—as she shows off Windows Live and Internet Explorer 8, some of the lifestreaming looks familiar now that AOL and Yahoo (NSDQ: YHOO) have already been there and started to do that.  One fun feature in Live Messenger: typing in an emoticon changes the dynamic display picture to show the same emotion.

—Back to Ballmer: He promises communications that move seamlessly between voice, text and video, intuitive and responsive software. This would be the conceptual part of our show. This demo shows touchscreen tablets and Microsoft’s surface tables for academic use. A flexible display is the depth of a placemat and can roll up.

Video (via CES)

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