SEATTLE (AP) -- Microsoft Corp. will begin testing a version of Windows XP in January on the ''$100 laptop'' from One Laptop Per Child.

It has taken nearly a year of engineering to get the bulky operating system to run on the low-cost XO computer, Microsoft said. The XO uses flash memory instead of a hard drive and offers less storage space than most mainstream PCs.

In May, The Associated Press reported Microsoft's concern that the memory issue and other technical hurdles would stymie efforts to port Windows to the XO, which was originally designed to run a free Linux-based operating system.

The software maker has released Windows XP for other flash-based, low-cost computers, such as Intel Corp.'s Classmate PC, which has twice as much storage space. For the XO, Microsoft said it has reworked the operating system so it can start up and run from an extra memory card that plugs into the laptop's guts.

James Utzschneider, a general manager in Microsoft's Unlimited Potential group, said Windows XP for the XO won't be ready for widespread use until at least the second half of 2008. And, he said, technical hurdles were only part of the reason.

''It's been a fast-moving target for us to design towards,'' he said. ''We only had a handful of machines in the hands of our engineers in the last year. That, and fact they were still making hardware changes as recently as August, it slowed us down.''