CBS News Tech Guru Larry Magid looks under the hood at the latest edition of Microsoft Office, checks out what's new, looks for the familiar, and offers some advice.

With its usual amount of hype and fanfare, Microsoft on Oct. 21, released Office 2003, the latest version of its suite of application programs. The standard version of Microsoft Office comes with Word (word processing), the Excel spreadsheet, Outlook e-mail and information manager and PowerPoint presentation software. The small business edition also includes Publisher, a desktop publishing program, and the Professional Edition comes with the Microsoft Access database program.

Office has been on the market for many years and even before the newest version, Microsoft had plenty of time to use its considerable resources to outclass its competition in terms of both features and marketing. As a result, Office has long been ubiquitous – hundreds of millions of people use Office in every part of the world.

In other words, the incumbent version of Office (Office XP) is a hard act to follow. It already does just about everything that most consumers, professional and students would want to do with a suite of programs.

With that in mind, Microsoft is out to convince customers to shell out money to upgrade. Just how much money depends on who you are and where you buy it.

The standard edition costs $239 for an upgrade or $399 for a new copy. An upgrade to the small business edition is $279 or $449 for a new copy. Office Professional is $329 and $499 respectively, though big organizations get volume pricing.

If you live in one of the 52 percent of American homes with a student or a teacher, you can get a specially priced version of the standard edition for $149. That edition can be legally installed on three computers in your household and it’s not just an upgrade. You don’t need to own an old version of Office to use it.

But – at the risk of sounding like a Ginsu knife commercial – there’s more.

I don’t know if any of these deals will be around as you read this, but as I was writing this column, some retailers were offering $300 of free hardware for people who spent $149 for the Office Student and Teacher Edition.

I’m not usually a sucker for ”deals,” but OfficeMax was giving away a Hewlett-Packard color printer, a 2-megapixel HP digital camera and a 32-megabyte memory card with every copy of Office. That deal may be gone or about to expire, but it’s tempting me to buy an extra copy of Office just to get the free hardware.

So, deals aside, is Office worth it? For many, the answer depends on how much time they spend dealing with e-mail. While Microsoft has made improvements to all of its applications, the one improvement that jumps out at you is the new version of Outlook, the e-mail and personal information management program.

Outlook has long been a program that users love to hate. It’s always been powerful and flexible, but the old version was a bit awkward to use and sometimes slow and buggy. Even not counting my spam, I get hundreds of e-mail messages a week and many contain important information that I need to get back to. Outlook has an improved and faster search system and the ability to create search folders.

Here’s how they work. You enter in a search string such as name, company or e-mail address and Outlook finds all occurrences. You then select ”Save search as search folder” and it creates a folder with pointers to every message that contains that string. As new messages with that text arrive, a virtual copy is placed in that folder. To save time and disk space, the message itself isn’t copied, just a pointer to the message.

Speaking of spam, Outlook now has spam filters that do a pretty good job of filtering out junk mail. You can set them for low

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