Microsoft is launching a cut down version of Windows XP, as "Starter Edition". This version will feature (or rather not feature) limited graphical capability and will only allow the user to run three programs at once.
Full story at: http://news.bbc.co.uk/1/hi/business/3554084.stm
"… in an effort to halt the rise of low-cost Linux software"
"… it hoped the new software would also help deter consumers from buying pirated versions of its XP system"
I don’t see a XP Retarded Edition helping in either of these battles.