1. Bad: Upgrading from Windows Vista to Windows 7 E shouldn’t be a problem whatsoever, despite what Microsoft may say. This, unfortunately, doesn’t do much for Microsoft’s image in Europe (unless Steven can come and tell us specifically why Windows Vista can’t be upgraded to Windows 7 E)
2. Good: Windows really does rely on Trident for at least a few non-browsing-related functions, which makes sense given how useful HTML can be for creating a UI. It also gives a sense of validity to Microsoft’s claims with regards to the EU.
3. Bad (for browser peddlers, Microsoft, and the user. Good for the EU): The EU, in its limited comprehension of how a browser works, might now use this as “evidence” of Microsoft being deceitful.
4. Good: Your shiny new better-than-Snow-Leopard OS won’t be as gimped as you originally thought.

This also means that any applications which use Trident for rendering any HTML to present an interface to the user will still work without needing a browser, which means that application developers should still be happy.

You can catch Rafael’s guide here. While you’re at it, if you’re a native of an EU-governed state, please email them a few one-fingered salutes on behalf of the rest of the world.

Update: Paul would like to note that Microsoft has been “very upfront” about Windows 7 E having the Trident rendering engine. The fact is, Microsoft hasn’t really done a good job at pushing this note around, and given Microsoft’s other communication issues (again, noted by Paul), I’m inclined to say that the existence of Trident actually is news.

In fact, Microsoft also posted about it on their legal blog… in typical legalese. The official statement is:

Most importantly, the E versions of Windows 7 will continue to provide all of the underlying platform functionality of the operating system—applications designed for Windows will run just as well on an E version as on other versions of Windows 7.

To those of us who assume things in the most unrealistically general sense, “underlying platform functionality” includes Trident, but this by no means makes it obvious that Trident will still be in Windows 7 E, thereby proving Paul’s previous point about communication being a problem.