Microsoft Corp. has been hit with a lawsuit that alleges it has used deceptive practices by letting computer makers claim their machines run the latest version of its Windows operating system.

Microsoft denies the claim.

A proposed class-action lawsuit claims that the company permitted hardware manufacturers to use the "Windows Vista Capable" slogan to promote their goods, even if they were incapable of supporting Vista's key new features, the Seattle Post-Intelligencer newspaper reported Tuesday.

Microsoft released consumer and retail business versions of its new Vista operating system in January. Key features of the new software include a new glass-like "Aero" interface, the "Flip 3D" three-dimensional view of open windows that allow users to quickly switch applications, and the ability to connect to external video and audio through the Media Center PC interface.

The lawsuit alleges that Microsoft engaged in a deception by allowing PC makers to use the "Windows Vista Capable" logo on machines that could run only the Windows Vista Home Basic edition, which lacks the advanced features.

"In sum, Microsoft engaged in bait and switch — assuring consumers they were purchasing 'Vista Capable' machines when, in fact, they could obtain only a stripped-down operating system lacking the functionality and features that Microsoft advertised as 'Vista,' " the complaint alleges. That resulted in people buying computers that couldn't run "the real Vista," the suit claims.

The suit further alleges Microsoft chairman Bill Gates added to "deceptive marketing" when he said that PC users could upgrade to Windows Vista for less than $100 US in a Jan. 29 appearance on NBC's Today show. In fact, that is the cost of upgrading to the Vista Home Basic version of the software, the suit says.

The complaint, filed last week, seeks class certification and unspecified damages.