On Monday, Microsoft (NASDAQ:MSFT) announced a round of musical chairs for some of its most important executives. The Redmond, Wash., computer giant announced the creation of the Windows Core Operating System Division (COSD), which will work within Microsoft's Platforms Group. The new unit, headed by Microsoft Senior Vice President Brian Valentine, will be charged with shepherding all aspects of the Windows core code through development to testing.

Many industry observers were quick to ask, with a mixture of snarkiness and justifiable incredulity, "Shouldn't Microsoft already have had a division like this?"

Of course, but cut the Redmond whiz kids some slack. Keeping focused on the core OS is not as simple as it sounds.

Over the past few years, Windows operating systems have ballooned into all-encompassing Microsoft mega-suites, packed with new features and slews of extra doodads: They now include dozens of products that used to be ancillary, from disk defragmenters to instant messengers, MP3 players, and moviemakers.

As the Windows OS gobbled up more of our hard drives and taxed even the newest, fastest processors, analysts and consumers (this one included) often wondered if Microsoft had stopped seeing the forest for the trees. Spectacular exploitation of security flaws, like this summer's fabled virus attacks, did little to inspire our confidence in Microsoft's core product.

Microsoft couldn't have picked a better time to get back to basics. This refocus comes as the company puts the finishing touches on major service packs for Windows XP and Server 2003. And thousands of Microsoft code-heads are ramping-up development of the company's next generation operating system, code-named Longhorn, expected to debut in 2005.

Some tech analysts view the reorganization as a way of consolidating to compete against the growing threat of Linux in personal and enterprise platforms. Personally, I think that Linux is a long way from competing with Microsoft in the home-computer market. If it's too technically intimidating for geeks like me, who build their own computers, I doubt it can win over "normal" users, like my dear father, who freaks out every time he gets an unexpected dialogue box.

Competition is fiercer in the corporate world, where upstarts like Red Hat (NASDAQ:RHAT) have thrown enough elbows to clear a space for a commercial Linux marketplace, and old dogs like Novell (NASDAQ:NOVL) have purchased some of the new kids on the block, hoping for a life-saving, Linux transfusion. I say bring it on. If it takes the threat of Linux to spook Microsoft into improving its most basic product offering, we all stand to benefit.

Of course, it remains to be seen whether Microsoft's Windows shuffle is more than just a media-friendly makeover. It's also hard to say whether the new focus will have an impact on Microsoft's already-beefy bottom line. The well-entrenched company holds such market share that no matter what it produces, most of the world's future computer users will end up paying for a copy.

Priced at 29 times trailing earnings and 22 times next year's estimates, Microsoft is a bit too rich for this Fool's pocketbook. But then a lot of folks wiser than I would argue that the valuation is justified by its status as software's 300-pound gorilla. If Microsoft's new core OS team can deliver the goods, then friends of the gorilla may have the last laugh.

Want to weigh in on the upcoming Windows-Linux battle royal? Visit the Microsoft and Red Hat discussion boards (free trial required).

Nerd-in-denial Seth Jayson likes to dissect and swear at his computers when he should be shoveling the snow. Deep down, he believes that all operating systems are written in damp, fetid caves by tricksy little dwarves. He warily invites your OS rants at FoolishSeth@sethj.com . The Motley Fool is investors writing for investors .