A new 'slate PC' from HP described as "almost as portable as a phone and as powerful as a PC" was the highlight of an underwhelming CES keynote delivered by Microsoft CEO Steve Ballmer and Robbie Bach, president of the company's Entertainment & Devices division, on Wednesday night.

The two executives devoted much of the presentation to reviewing Microsoft's successes over the past 12 months and a look ahead to a year of Xbox 360-related launches.

Windows 7 remains Microsoft's favourite talking point, and Ballmer reflected on the new operating system's successful first three months on sale. He said Windows PC sales were up 50 percent in the US during the first week Windows 7 was on sale, and quoted research showing a 50 percent increase in Windows PC sales during 2009's end-of-year holiday sales. Ballmer said Windows 7 has been the fastest selling PC OS in history.

Microsoft's CEO showed off a number of products from the company's partners which demonstrate the variety of hardware designs capable of running the full version of Windows 7, including the thinnest all-in-one desktop PC on the market - Lenovo's IdeaCentre A300; Dell's super-thin Adamo laptop; Asus' nx90, a twin-touchpad multimedia laptop featuring Bang & Olufsen speakers; and small form factor PCs from Acer and Dell.

Ballmer also previewed new slate PC form factors coming this year, including new models from Pegatron, Archos and the as-yet-unnamed HP model.

He described the HP tablet, which was running Amazon's Kindle software for Windows 7 PCs, as almost as portable as a phone and as powerful as a PC - attributes which make it ideal for reading, surfing the web and taking entertainment on the go, according to Microsoft's CEO.

The biggest story on the Xbox 360 front was Bach's announcement that the Project Natal Xbox add-on will be released later this year.

Project Natal, which uses a combination of hardware and software to turn the body itself into an input device, was first demonstrated at the E3 conference last May, but until now had been a prototype technology with no firm release date.

Microsoft Project Natal

Natal uses a camera to track gamers and matches their real-life movements to those of an on-screen character. Early prototypes seen by PC Advisor also included a microphone for audio feedback into games.

Bach also announced a new 'Game Room' service for Xbox Live and PCs running Windows which features a range of 1980s arcade games. Over a thousand titles will be made available for the service over the next couple of years.

2010 will also be a big year for new Xbox games. Microsoft will release the next installment of its successful Halo franchise, called 'Halo Reach', a prequel that will "tell the story of the epic battle before Halo 1", Bach said.

It will also introduce a new genre of games, "the psychological action thriller", with a game called 'Alan Wake' that tells the story of a mystery writer who gets trapped in his own novels. "Think 'Lost', written by Stephen King and directed by David Lynch," Bach said.