Microsoft considered banning virtualizing all versions of Vista

Over on the Seattle PI website is an interesting article which looks at why Mac users won't be able to get their hands on Vista unless they buy the more expensive versions of Vista.  But buried in that article is an interesting bombshell.

Contained in the article is Microsoft's justification for banning the least expensive versions of Vista (Home Basic which retails for $199 and Home Premium which goes for $239) from being virtualized.

Lately Intel and rival chip maker Advanced Micro Devices Inc. have built virtualization-friendly hooks directly into microprocessors. The goal was to make virtualization work better, but Woodgate [Scott Woodgate, a director in Microsoft's Vista team] argues that the move created a security flaw -- essentially that malicious programs can run undetected alongside an operating system.

Woodgate said Microsoft considered banning virtualizing all versions of Vista entirely. But ultimately, he said, his team decided that the most technically savvy users, or people in companies with tech support, probably could handle Vista in virtualization programs, while home users should be steered away. [emphasis added]

Eh?  Am I reading that right?  Microsoft believes that there's a security risk in virtualization and doesn't want Joe Public to use it, but in the end decided that if you bought the more expensive versions of Vista that the risk was acceptable.  Also, Microsoft doesn't want home users to use virtualization because of the risks but it's just fine for power users and corporate users to be exposed to this undefined risk.

Give me a break.  That's the worst justification for prohibiting the virtualization of Home Basic and Home Premium that I've read so far, especially given that Microsoft released Virtual PC 2007 for free and with no "health warnings" for potential users. 

Also, why would tech-savvy users not want to make use of the cheaper versions of Vista for virtualization?  If Microsoft wanted to prevent home users from Virtualizing Vista would it not have made more sense then to prohibit the lower versions of Vista from hosting virtual machines (at least Windows-based virtual machines)?

Sorry Microsoft, I just don't buy the argument.  It sounds like a scam to me.  Either there's a credible security risk or there isn't.  Half measures and EULA limitations sound like nothing more than FUD.  I don't see how paying Microsoft more for the OS makes anyone safer.  Microsoft has been working hard to justify that users should buy Windows Ultimate and Windows Business and this virtualization limitation sound like nothing more than that.

Thoughts?