SAN DIEGO -- Microsoft plans to spend about $300 million to support the launch of Windows XP Service Pack 2 (XP SP2), company officials said.

The security-centric XP update, which enjoyed top billing at this week's TechEd conference, will be available as a "critical" download via Microsoft's Windows Update feature and will ship with all new PCs as part of an agreement with OEMs (define) and computer retailers.

In an interview with internetnews.com, Tony Goodhew, product manager in Microsoft's Developer Group, said a chunk of the $300 million campaign will be spent working with OEMs to get the service pack installed on new PCs. "We'll be working with retailers like CompUSA and BestBuy to have SP2 installed on all new machines, even those that were shipped to the stores without the upgrade," he said.

"Ideally, every PC in the store will have SP2 pre-installed. For those computers that ship to retailers without the upgrade, we're working to get the upgrade installed at the time of the sale to the consumer. The customer will be able to wander into store, buy a machine and walk out with SP2 installed."

SP2 is a complete overhaul of the security system and infrastructure of Windows XP. Goodhew, who spent time at TechEd showcasing the features, said the marketing campaign would also include training for enterprise customers looking to deploy the service pack.

The service pack, which has been delayed by bugs found during beta testing, will introduce technologies for network protection, memory protection, secure e-mail handling, secure browsing and PC maintenance. It features a brand-new Windows Security Center that allows the monitoring of firewalls, Automatic Update and third-party anti-virus software. It also warns customers about the need to apply patches.

Security experts believe Microsoft should ship free CDs with the service pack in order to get around the narrowband hurdle dial-up customers run into if they try to download the service pack. But Goodhew said it was likely consumers would have to pay for shipping and handling.

"You won't be paying for the CD so the price will be trivial. If you can afford to buy a latte once a year, you can afford to upgrade to SP2."

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The service pack will be released as a 100MB upgrade and Microsoft's Background Intelligent Transfer Service (BITS) technology will aim for a seamless experience, Goodhew added.

BITS makes use of leftover bandwidth to transfer files and is perfect to deal with issues of suspended downloads. For example, if a consumer is using 60 percent of bandwidth, BITS will only use the remaining 40 percent and will maintain file transfers when a network disconnection occurs, or a computer needs to be restarted. When the network connection is re-established, BITS will continue where it left off.

During a TechEd breakout presentation, Goodhew stressed the importance of testing enterprise applications to avoid disruptions once SP2 is widely deployed.

"We're very concerned about disruptions. That's the reason for all the work we've done since February to test and test and test. It's primarily around application compatibility. SP2 won't cause the death of the universe when we ship it, but you'll see categories of applications affected. Developers need to get in a test lab and run the service pack against their applications. They have to ensure their applications work with a host firewall-enabled. They have to test their codes with non-executable memory on 64-bit or capable 32-bit processors."