Software giant Microsoft demonstrated parts of its next-generation operating system, Windows 7, yesterday. The OS is designed to use touch-screen technology, which could signal the death of the humble mouse.

Chief Executive Steve Ballmer unveiled the much hyped touch-screen features of Windows 7 at The Wall Street Journal's 'All Things Digital' conference, calling it 'just the smallest snippet' of the operating system slated for release in late 2009.

The demo of Windows 7, almost two years before its release, highlights the perception that the current flagship Microsoft OS, Windows Vista, isn't quite living up to the company's expectations. But Microsoft's top two executives defended the much-maligned Vista, while acknowledging there had been problems.

'Vista has given more opportunity to exercise our culture than some products,' quipped Microsoft chairman Bill Gates. X