Microsoft’s Steve Ballmer Touts Vista-To-XP Downgrade Program. The licensing policy for Windows Vista lets customers downgrade it to Windows XP, Ballmer notes.

CEO Steve Ballmer has a unique sales pitch for the company’s Windows Vista operating system — if you don’t like it, you can turn it into Windows XP.

Referring to Microsoft licensing policies that allow customers who purchase an operating system to legally install predecessor versions on their PCs, Ballmer noted that the program allows customers who aren’t satisfied with Vista to use XP.

“Customers get both,” said Ballmer, during a brief interview at an event Tuesday in Washington, D.C.

Ballmer was responding to a question about whether Microsoft would extend Window’s XP’s shelf life beyond its scheduled June 30 expiration for the broader PC market. The company earlier this week said it would give XP a reprieve for installations on ultra-low cost desktops.

Ballmer implied that an extension for mainstream PCs isn’t in the cards because customers who want XP past June 30 can simply purchase Vista and exercise the downgrade option. “I don’t know how you can do better than getting both,” he said.

A number of PC makers, including Dell, are offering business systems that have been “pre-downgraded” from Vista to XP.

Ballmer’s comments indicate that Microsoft does not view the downgrade program as a mere licensing loophole through which a few disgruntled customers can retain access to Windows XP. Rather, it appears that the company is now formally endorsing the program and may in fact be counting on it to spur sales of Vista, which many businesses have rejected due to its hefty hardware requirements and incompatibilities with older applications.

The situation raises questions about sales figures that Microsoft has provided for Vista. In April, the company said it had sold more than 140 million Vista licenses since the OS became available to the public early last year. But Microsoft did not indicate what percentage of those Vista licenses have been downgraded to XP.

A number of organizations in the government and commercial markets have said they may bypass Vista and jump directly from XP to Windows 7 when the latter becomes available in late 2009 or early 2010.