LOS ANGELES -- Five years ago, Microsoft promised the Holy Grail of PC operating systems to the software developers who flocked to this city for an early glimpse of the company's next big thing.

Three years later, it gave them Windows Vista instead.

That's the history the company will be grappling with -- and attempting to overcome -- as it starts the cycle again this week. The unveiling of Windows Vista's successor, Windows 7, will give Microsoft a chance to repair the franchise's image following Vista's legacy of delays, abandoned features and post-release glitches.

"They really have to do something to redeem themselves, and say, 'Hey, we really can design software,' " said analyst Roger Kay, president of Endpoint Technologies Associates.

At separate conferences here this week and next, Microsoft will give independent software and hardware developers the first detailed glimpse of the next Windows version. The sneak preview is meant to get them working far in advance of Windows 7's scheduled 2010 launch to make programs, computers and devices that run smoothly on the new operating system -- and take advantage of its features in a way that persuades businesses and home users to upgrade.

"What people are looking for is a more polished launch -- a product that doesn't have a whole cycle of bugs to go through before it can be useful," said Jon Bach, president of Puget Systems Inc., a custom computer maker based in Kent, Wash.

This week's Professional Developers Conference could also prove pivotal for Microsoft's online initiatives. Ray Ozzie, who replaced Bill Gates as Microsoft's chief software architect, is expected to detail the company's plans in the key area of "cloud computing" -- in which PCs and devices access and synch up with data and programs running on remote servers. Microsoft CEO Steve Ballmer said recently that the company is working on a new operating system for cloud-based programs.

The conference's dual focus on Windows and cloud computing reflects the ties the company wants to create between online services and its traditional software. That's the idea behind its "software plus services" initiative. Because of that, there's likely to be lots of crossover between Ozzie's presentation Monday and Windows chief Steven Sinofsky's unveiling of Windows 7 the next day.

But Windows itself remains the company's flagship product, and its biggest source of profits.

Getting developers on board at PDC and the subsequent Windows Hardware Engineering Conference will be especially critical for Windows 7 in light of the hardware and software compatibility problems Windows Vista experienced after its launch. Glitchy software applications and annoying security popups frustrated many early Windows Vista users. And problematic or non-existent device drivers forced some users to struggle with tasks as basic as printing.

The situation has improved through a steady series of updates and improvements from Microsoft and others. But those memories don't fade easily.

"They can't afford another faux pas," said analyst Laura DiDio, principal at Information Technology Intelligence Corp. "Vista in and of itself is not a bad OS. But the incompatibilities with basic third-party tools were just devastating to them."

Microsoft also faces an emboldened rival, Apple, whose Macs are basking in the glow of the iPod and iPhone. And depending on the duration of the global financial crisis, Microsoft could be launching Windows 7 into a tumultuous economy -- in which the companies that survive could be increasingly wary of spending scarce resources on software and hardware.

In other ways, the challenge won't be as steep this time around. Windows 7 is expected to be a more incremental upgrade, not the dramatic overhaul that Windows Vista represented. In that way, Microsoft is seeking to build on the relative stability Vista has achieved, particularly following the release of the Service Pack 1 (SP1) update for the current operating system. 

"Windows 7 is Vista SP3," predicted Kip Kniskern, staff writer at the blog LiveSide.net, which reports on Microsoft's online initiatives. "There's going to be some new stuff, but the difference between Vista and Windows 7 will be much, much less than the difference between Windows XP and Vista."

Microsoft sought to build early buzz for Windows 7 by touting new touch capabilities this spring at a Wall Street Journal conference. More recently, Sinofsky and other Windows executives have discussed preliminary Windows 7 details on their blog -- including plans to make User Account Control security popups less annoying, and to improve the way windows are handled.

Many more details are expected at the conferences this week and next. At the same time, the company is clearly being more careful this time not to promise features it's not certain it can deliver. That's what happened in 2003, when Microsoft Chairman Bill Gates unveiled plans for a unified Windows file system -- dubbed WinFS -- that he described as a Holy Grail of computing.

The feature was later dropped.

In an Aug. 14 blog post, Sinofsky explained that the idea this time is "not to set expectations around the release that end up disappointing you — features that don’t make it, claims that don’t stick, or support we don’t provide." He added, "Starting from the first days of developing Windows 7, we have committed as a team to 'promise and deliver.' " 

Starting this week, the world will see if Microsoft can live up to that promise.

Follow the news from Microsoft's Professional Developers Conference this week on TechFlash.