Windows 7The falling cost of computers means keeping up with the latest technology has never been easier. You can get hold of a brand-new desktop PC with a decent specification and Microsoft's just-launched Windows 7 operating system (OS) for less than £400.

Pay £100 more than that and you'll get a pretty powerful PC compared to the XP or Vista system you're using at the moment. This is definitely the safest option if you want Microsoft's new OS but are wary of upgrading an old PC.

You might not get industry-leading gaming framerates or a huge HD screen for watching movies, but the systems in our sub-£500 PCs group test this month prove you needn't pay through the nose for a new system. And that's just as well, because most people haven't got huge reserves of cash to splurge on a new computer at the moment; bargains are the order of the day.

This doesn't just apply to hardware, either; you can save a fortune on software too. In the past, when offering advice on ways to get a fully featured new computer without breaking the bank, PC Advisor would download and test dozens of free software applications that do a similar job to those boxed, branded products you'll find on the shelves at your favourite IT retailer. Freebies such as OpenOffice.org, AVG and The Gimp have provided us with viable alternatives to the paid-for products that have traditionally dominated.

But this hasn't gone unnoticed by the big software brands, which are finding that free software is eating into their profits. Fortunately for you, they're fighting back with great deals of their own.

Microsoft has announced that its Works productivity suite will soon join the likes of Clippy and Bob in the retirement home for unpopular products, to be replaced by a free version of Office. Shipping with new PCs from next year, Office Starter 2010 will be a hobbled version of the full suite, but Microsoft hopes it will stop home users from switching to OpenOffice.org or Google Docs. Computer buyers will get Microsoft Word and Excel, but not Outlook or PowerPoint. It's important to note that the product will be supported by ads - unless you upgrade to the full version of Office 2010, you'll have to contend with sponsored messages in a window at the bottom of the interface.

Ultimately, Microsoft hopes that by getting you to try out Office 2010, even in its restricted form, it might be able to convince you to pay a premium for the full version. But if you, like most people, are what Microsoft labels a 'casual Office user' and aren't too put off by the commercials, there's no reason why you should switch. Meanwhile, it seems not many people will miss Microsoft Works. With its outdated interface and annoying quirks, such as forcing you to save a document in the Works format, even if the file had previously been saved in another one, it never really felt like a great deal, even when it came for free with a new PC.

Christmas gift guide

The next few weeks are still likely to be the among the most expensive of the year, and also fairly stressful if you're the type who struggles to choose gifts for friends and family. To ease the burden, we've rounded up 50 technology gift ideas, with suggestions for everyone from the music lover or film buff to the photo enthusiast and gadget fan. See the full rundown in our January issue, on sale today.