After two decades at the center of Microsoft’s business, and three years in the technology industry’s doghouse, the Redmond, Washington, company’s Windows division will try to recover with the Oct. 22 release of an overhauled version of its flagship PC operating system.

Despite positive early reviews for Windows 7, the pressure is high. The Windows business could literally afford another flop, with more than $10 billion in annual profits and a dominant position on personal computers. But the struggles of Windows Vista have put something else on the line.

“The company’s reputation is riding on this,” said analyst Roger Kay, president of the Endpoint Technologies Associates research firm in Wayland, Mass., and a consultant to the Windows division.

The outcome will determine the fate of a product line that, perhaps more than any other, has been responsible for making the Seattle region a major technology center. With the Windows 7 launch, Microsoft will be attempting to overcome the difficult economy and ensure a role for Windows in a world increasingly focused on mobile phones, consumer gadgets and online services.

That’s a tall order. But if the experience of Jonathan Prentice is any indication, Microsoft might just have a shot.

Prentice, a 33-year-old technology consultant, was a New Zealand college student 14 years ago when his enthusiasm for Windows 95 won him momentary fame as the first person in the world to buy it. But like many others, he greeted the January 2007 launch of Windows Vista with a shrug—using it reluctantly, only to endure the performance and compatibility problems that made Vista a constant target of criticism, jokes and Apple Mac ads.

Windows 7 has made Prentice a fan again. He has been using a preliminary version for several months. He describes the new operating system as fast and easy to use.

Prentice doesn’t like some aspects of Windows 7, such as the streamlined control panel—which he immediately switched to “classic” mode. But overall, he says, Microsoft has “actually produced a pretty damn good OS (operating system) without needing a service pack to make it usable.”

He isn’t alone in that assessment. Early reviews of the new operating system have been largely positive, with influential Wall Street Journal technology columnist Walter Mossberg recently calling Windows 7 “the best version of Windows Microsoft has produced.”

Microsoft’s challenge now is to translate that momentum into success in the market.

In particular, industry analysts will be watching to see if Windows 7 can avoid the hardware and software compatibility problems that plagued Windows Vista’s debut. Another key test will be how quickly Windows 7 is adopted by big businesses, particularly those that avoided Windows Vista.

Microsoft also needs independent software vendors to make programs that work with new Windows 7 features, such as support for touch-sensitive screens. That would give PC users extra incentive to upgrade.