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Engadget has live coverage of Intel’s press conference at CES.

Otellini highlighted a future featuring an American visiting Beijing. A pocket-sized mobile Internet device audibly and visually translated building signs, restaurant menus and conversations in real-time. The applications also showcased how the traveller could also prevent getting lost with step-by-step visual cues of landmarks to watch for appearing on the device’s screen.

Otellini was also joined onstage by Steve Harwell, lead singer of the band Smash Mouth, to demonstrate how the Internet will enable more natural social interactions and better shared experiences. Using Ejamming, a music collaboration web site, Harwell was able to rock out with his band remotely.

SceneCaster (above) is aimed at Second Life, but allows more than 80 people into any one space and can be embed onto Web pages or Facebook profiles.

A future 3-D virtual world using photo-realistic avatars controlled in real time by each person’s physical movements versus using computer mice and keyboards was also demonstrated. Otellini enlisted the help of Bigstage, a technology that can render realistic avatars from three camera angles and 3d Walkthroughs. EveryScape lets people visually explore any destination, inside and out, by walking down streets and going inside local buildings and landmarks.

To bring these concepts to reality, Otellini demonstrated for the first time Intel’s first system-on-a-chip product optimized for a new generation of set-top boxes, media players and TVs. Codenamed “Canmore”, it will enable easy migration of Internet applications and services to TVs, providing rich interactive experiences to complement traditional TV viewing.

Otellini said Canmore will be available in the second half of this year and will pair a powerful PC-class processor core with leading-edge, dedicated A/V processing that can play 1080p video with 7.1 surround sound, a 3-D graphics unit for cool user interfaces and online games, and technologies to enable broadcast TV.

A spokeswoman at the Intel booth on the show floor talked up Wimax on their Menlo platform, but new MID devices were staying under glass.

No mention of Viiv. End of show.

Before his last CES keynote speech as a full-time company employee (video clip), Bill Gates talked with IDG News about his legacy and directions for Microsoft.

Bill Gates Explains the Difference Between Microsoft and Apple in this Gizmodo interview and Looks Ahead at the “Next Digital Decade”. C/Net has Gates on OLPC and Windows Home Server.

Microsoft didn’t announce any big deals, save for a series of partnerships with content providers, including one with NBC to put video of the upcoming Olympics in Beijing exclusively on Microsoft’s MSN site. Gates and Robbie Bach, president of Microsoft’s Entertainment and Devices Division, cited progress with various products.

Robbie Bach says he expects the Xbox 360 to topple revenue records in 2008, given total spending on 360 products last year.

British Telecommunication announced today that it’s forming a partnership with Microsoft to allow customers to watch TV through their Xbox 360. Customers that sign up to BT Vision, a digital and Internet-TV platform, will be able to play computer games, watch TV and order movies through their Xbox 360 console from mid-2008.

BT, which is offsetting declining voice revenues, has signed up more than 100,000 customers to BT Vision, which launched just over a year ago. A company spokesman added that the new service, unveiled today, will allow family members to access different content from various parts of the home at the same time.

Microsoft hopes IPTV — especially tied in with games and mobility — will be the start of something big.

For a wrap on this weeks CES show, check out the full coverage on BetaNews, C/NET, Engadget, Gizmodo, InfoWorld, Network World, PC Magazine, PC World, Small Net Builder, Blog Runner and Techmeme, Google and Yahoo.

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