This is a clever move by Microsoft, and one that doesn't come entirely unexpected. Windows 8 is essentially an entirely new operating system, and bears very little resemblance to its predecessors - at least, from an average consumer's perspective. A low price like this will surely entice people to upgrade. I mean, $40 is less than what I spend on groceries each week.
If you upgrade from Windows 7, you can bring your files, settings, and programs along. If you upgrade from Vista, you can bring along your files and settings. Upgrade from the
oh god please die already will you I hate you venerable Windows XP, and you can only bring your files along for the ride. You can also download the .iso file and burn it to USB or DVD for a complete format and reinstall (my preferred option).
Other than the download version, you can buy the upgrade in stores on a DVD for $69.99. Windows Media Center is a free, optional install for those of you who are so inclined. On top of that - and this gets a very big rejoice from me - Microsoft continues with tradition and will, again, offer OEM versions of Windows 8 at lower prices (compared to boxed versions), for instance for those of us who build our own PCs or for use in virtual machines.
With Apple's operating system upgrade pricing, the low price of the Nexus 7 (pre-ordered one yesterday!), and now this, we're really seeing the price of technology products coming down considerably, and that's a great thing for us consumers. I dislike it when I know I'm paying 50% margins, because you're essentially being ripped off.
I will most certainly buy at least two upgrade copies of Windows 8 (yes, I've grown to like it, despite its many, many flaws), but a few questions remain. Apple's operating system licensing allows for several installs within a family - will this be possible with the Windows 8 Pro license? Also, can we upgrade our release preview installs?