Microsoft expects to finish work on Service Pack 2 for Windows XP next month. The much-anticipated security focused update should be available to users shortly after that.

The head of Microsoft's Windows client business, senior vice president Will Poole, is expected to announce today Microsoft's plan to end work on SP2 and release the code to manufacturing in August during a keynote speech at the company's Worldwide Partner Conference in Toronto, a Microsoft spokesman has said.

With that release to manufacturing, Microsoft will begin the process of distributing the already delayed service pack to users. The delivery will start with the launch of a new version of Windows Update, called Windows Update Version 5, the spokesman said. The new update service includes smart downloading technology that will allow users to interrupt the large SP2 download and resume it later, especially useful for users of dial-up Internet connections.

Although Microsoft has called Windows XP SP2 a service pack, analysts have said that the update really is more comparable to a Windows upgrade. SP2 contains bug fixes and updates, but it also offers new features and makes significant changes to the Windows software in four main areas: network protection, memory protection, e-mail security and browsing security.

The service pack will be a significant download. Microsoft wouldn't comment late Sunday, but the latest test version was 264MB. The final version, insiders say, will be smaller in size but still a large file.

A first beta of the Windows XP update was released in December, followed by release candidate 1 in March and a second release candidate in June. Hundreds of thousands of developers and IT professionals have already tried out the software. Once released, the service pack will represent one of Microsoft's most broadly tested products to date, the company has said.

Microsoft has warned that Windows XP SP2 could break existing applications because of the changes that are made. The company has called on all developers and technology professionals to test the service pack.