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The company already knows of some problems and expects others. Only about 40 percent of Windows XP applications can run without any modification, for example. A good chunk of the remainder require only very slight tweaks. Many of those incompatibilities have already been fixed, either through workarounds put in place by Microsoft or in collaboration with the application's maker.

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Virgin, one of the first providers to offer such a service, hopes the service will appeal to its often cash-strapped customers, 65 percent of whom are younger than 30 years old. "Very practically speaking a lot of our customers are value conscious. They manage budgets that are finite," said Howard Handler, the company's chief marketing officer.