The story is going around that the initial Intel x86-64 processors isn’t compatible with Windows XP 64-bit Edition.
Actually, if you read the original story, you’ll find out that it’s the other way around.
At the time Microsoft released the public beta of this OS, Intel wasn’t in the picture. Therefore, some programmer figured that an easy way for the OS to determine whether or not it should be installed is for the OS to ask the CPU, “Who’s your daddy?” If the CPU answered back “Intel” or anything else besides “AMD,” the OS response is and ought to have been, “You are not for me,” and stop installing.
That’s just what Microsoft said happened. Of course, matters have changed since then. 🙂
So the problem isn’t with anything Intel did, or anything wrong with the chip itself, but rather what Microsoft did (and the action itself was perfectly reasonable at the time). If you took a Hammer and put “Intel” rather than “AMD” as part of the CPUID in the chip, it would be “incompatible” too, for exactly the same reason.
This in and-of-itself is a tiny correction, a couple lines of code, and if it was worth the bother, you could probably come up with a programming workaround.
However, as the article linked above points out, Microsoft already has made the necessary fix in build number 1164 of Windows XP 64-bit Edition, which is already being used by corporate testers. MS will release it publicly in the next version of its beta. This will probably be about the time when any x86-64 enabled chips will become publicly available for sale.
In short, now that we have the explanation from MS as to what happened, it’s a non-event.