Microsoft has produced a new version of its controversial Windows Genuine Advantage tool that it hopes will correct previous faults and prevent innocent people from being branded software pirates.

The software, first introduced in 2005, will now have an "indeterminate" category for PCs with Windows installations of questionable validity. Previously large number of Windows users whose PCs were scanned by WGA Validation and failed to prove to Microsoft's satisfaction that they were running non-counterfeit copies of Windows XP were labelled "non-genuine".

That caused WGA Validation to disallow access to certain Microsoft software, and WGA Notifications to send periodic messages asking users to reinstall XP or buy a legitimate licence for it, leading to "nagware" complaints from some users.

Many users also claimed that WGA, due to technical glitches or other issues, mislabeled their genuine copies of Windows XP as pirated. Microsoft has always maintained that the rates of such "false positive" errors are very low. But at the same time, its online forum for WGA-related problems has registered nearly 20,000 postings from aggrieved users.

The new "indeterminate" category covers copies of XP that failed to prove they were genuine yet did not use a license of XP known by Microsoft to be pirated. Microsoft keeps a database of pirated XP licenses, most of which are stolen from corporations using a single volume license to install multiple Windows on multiple PCs.

Users with copies of XP labeled "indeterminate" are also provided with more information to troubleshoot the problem, according to a Microsoft spokeswoman. The majority of Windows XP users, whose copies of XP have already passed Microsoft's WGA program, can safely ignore the updated tool.

Microsoft initially tested WGA Notifications this summer as a "high-priority" fix via Automatic Updates, a category typically reserved for security and bug fixes. Many users were surprised to get WGA Notifications downloaded automatically along with their security updates and complained, saying that Microsoft was acting no different than a purveyor of spyware.

Microsoft subsequently changed WGA Notifications to nag users less often and allowed them to uninstall it. But it was kept as a high-priority update.

According to David Lazar, director of Genuine Windows for Microsoft, the revamped WGA Notifications still remains a "high-priority" update, though users will be able to deselect it from being downloaded and installed. Users running copies of XP that Microsoft has already determined to rely on one of four pirated Windows license keys are now being asked to download the revamped tool. That will be gradually expanded to include other users over the "next several weeks and months", according to Lazar.

The new version of WGA Notifications will also not incorporate a "kill switch" that cripples PCs that fail to prove that they are running genuine copies of Windows XP. That more aggressive feature, called Reduced Functionality Mode (RFM), is being introduced in the upcoming Windows Vista OS.

The release also features a new installation wizard and will display validation results as soon as the tool has been installed. The software doesn't need to be rebooted after its installation, Microsoft said.

Microsoft plans to update the tool every 90 to 120 days, as a way to react to re-evaluation of the software and any changes in software piracy.

Original reporting by Computerworld