It seems that Microsoft wanted to demonstrate how the new Vista was so advanced. So it did a demo of some voice recognition software, new to Vista. But being true to the Windows world, it failed miserably. It rarely got anything correct, and at times came up with some humorous results. It had the audience in stitches. Probably not what MS was hoping for. It sounds similar to the grammer/spelling/punctuation correcter in Word. How it knows what you meant and "fixes" it for you.
Actually Apple had a similar problem with the release of the Newton. The handwriting recognition was far ahead of its time but still not reliable enough for prime time. Of course this was while Jobs was not with the company. He would have never gone through with something which was so flawed.
I'm not sure why MS does this type of risky demo when the potential bad publicity would be far more harmful than the good publicity if it actually worked. Anyway it did amuse his audience, maybe that was the goal.
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