Microsoft has launched the home version of its Windows Vista operating system at a glitzy party in New York with Bill Gates, marking the roll-out of the software to retailers in 70 countries.

Microsoft touted the new operating system, which replaces Windows XP, as having new graphics, improved functionality and more rigourous security, aiming to handle games, music and videos much better than previous versions.

Gates helped launch the software on Monday night at a dramatically-orchestrated event near Times Square, New York City, telling his audience that Vista was "the central element that allows the digital lifestyle to thrive."

Vista then went on sale from midnight on Tuesday and some retailers stayed open to offer the most ardent Microsoft fans the chance to buy the software at the first opportunity.

In Japan, hundreds of people waited in the cold to buy Windows Vista at stores in Tokyo's Akihabara electronics district and broke into a loud cheer outside the Yodobashi Camera shop when the clock struck midnight in Japan.

Retailers and the electronics industries are hoping that Windows Vista, which took five years and six billion dollars (4.6 billion euros) to produce, will boost demand for personal computers.

However, there are complaints that the new operating system, which is expected to be refined by Microsoft as flaws emerge, hinders the operation of some games because of stringent new security settings.

US-based computer game publisher WildTangent, makers of Internet games such as Super Granny 3 and Polar Bowler, said on Monday that Microsoft "has gone overboard" by making Vista so secure it blocks or disables play.

Reviews of Vista have highlighted its improved security settings, which include parental controls to block inappropriate content for children, but have also said the software is more evolutionary than revolutionary, breaking little new ground.

Microsoft is engaged in a fierce battle for computer sales with a resurgent Apple Computer and faces competition for software products from online giant Google.

Microsoft began selling business versions of Vista and Office 2007 in November.

The Redmond, Washington-based giant has heralded the oft-delayed Vista as its most sophisticated, secure and intuitive operating system since Windows was first rolled out to challenge Apple's Macintosh software in 1985.

"It is a privilege to be here for the biggest launch in software history," Microsoft chief executive Steve Ballmer said after stepping on stage at a New York theatre used for a launch party on Monday.

A US family that helped test Vista later came on stage and touched a computer icon that fired up electronic billboards throughout Times Square with the advertising slogan "The Wow Starts Now" emblazened across them.

The event near Times Square was the beginning of what promises to be a flashy and expensive campaign by Microsoft. Gates was to begin a Vista-touting tour with stops in London, Edinburgh, Bucharest and Paris on Tuesday.

The success of Vista will also depend on the outcome of Microsoft's battle with pirates and competitors.

The new operating system also hit the streets of China on Tuesday -- in pirated form.

In an electronic market in the southern Chinese city of Shenzhen, scores of sellers were offering the brand new software for as little as 10 yuan (1.3 US dollars), along with Microsoft Office, anti-virus software and others.

In Europe, Microsoft could face more anti-trust action after losing a battle with the European Commission about previous versions of Windows that resulted in a record fine of 497 million euros (642 million dollars) in March 2004.

Competitors group ECIS, which includes such tech giants as Oracle, IBM and Nokia, filed a complaint with the EU regulator in February 2006 targeting Vista and Office. They updated their action with details on Vista last month.

They have warned that, as with earlier Windows versions, Vista is designed in a way that makes it difficult for them to build compatible software, hampering competition in effect.

In the US, the top-end Vista Ultimate is priced at 399 dollars for the full package and 259 dollars as an upgrade to Windows.

A Home Premium version is priced at 239 dollars new and 159 dollars as an upgrade, while a stripped-down "basic" Vista will cost 199 complete or 99.95 dollars as an upgrade.

A low-budget Windows Vista Starter edition for "first-time PC users" will be sold exclusively in developing countries.