Codename Nemo is designed to be an add-on for Windows Vista (Home Premium and Vista Ultimate editions), that integrates Spaces, Messenger and Live Call into a UI designed for large monitors and TVs. Nemo essentially creates a Windows Live Media Center, and is optimized for use by Microsoft Media Center remote, as well as keyboard. Of particular note is the 3D Gallery view for browsing Windows Live Spaces, shown below, presumably built using the new Windows Presentation Foundation that will be included in Windows Vista.

By bringing Windows Live to the living room, Microsoft could expose users to its online services in a way that competitors such as Google or Yahoo have not yet exploited. With content plus advertisers equaling revenue, this can only be a good thing for MSN. Adding MSN Soapbox or MSN Originals integration into this Windows Live package could present Microsoft with a content delivery method that really starts to move the PC out of the office. Combine this with live concert streaming thanks to MSN’s recent partnership with Control Room, and suddenly the Media Center PC has much more to offer. Nemo would make upgrading to Vista a lot more attractive for the Windows Live fans too.

Although initial indicators that Nemo would be in beta by the end of 2006, the project now appears to be on hold, for reasons unknown. We have heard it was demoed at MGX 2006, an internal-only Microsoft conference for those working in global sales and evism, so we’re expecting (and hoping) to see it back on track soon.