Netbooks remain hot, and they stand to get even hotter this fall: While Windows Vista is too bloated for most netbooks, Windows 7 has been demonstrated to run on them rather zippily.

While that's good news for those who plan to buy a new machine this holiday season, it poses a problem for those looking to upgrade netbooks they already own. That's because netbooks, virtually by definition, don't include optical drives. And the most reliable way to upgrade Windows is to pop in the Windows DVD and let Microsoft do its thing.

So how does one upgrade a netbook without an internal optical drive? An external optical drive connected via USB is a perfectly acceptable solution, but it's a tough sell to convince buyers of an ultra-cheap laptop to shell out more money for an optical drive they'll basically use once, just for this upgrade. Downloadable services are also a possibility, but they still require some sort of storage medium from which to do the install. (That is, you can't upgrade Windows from the same hard drive you're installing it on.)

Perhaps another solution exists, ponders Cnet's Ina Fried.

Sources tell Fried that Microsoft is considering a novel way of packaging Windows 7 for just the reasons outlined above. In addition to standard DVD packages, the company may also sell Windows 7 preloaded on USB thumb drives.

As capacities have increased, moving applications, games, and entertainment to flash-based media has been talked about for years, and a few applications, like the SanDisk slotMusic system, have even tiptoed into this arena. But computer software has really resisted the change completely.

Microsoft isn't commenting on whether the plan is legit, but I have to say I love the idea -- especially if there was a little extra room on the thumb drive to drop the installation files for the other applications you wanted to load onto the PC after you upgraded Windows -- and possibly even space for backing up files from the computer before you run the upgrade. Come on Microsoft, let's make it happen!