Live from Microsoft’s Build 2012 keynote!

We are live, front and center, in one of the largest tents ever contructed getting ready for Microsoft to kick off Build 2012, it's annual developer conference. It's been a big week for Microsoft, what with the launch of Windows Phone 8, its Surface tablet, and of course, Windows 8. The last piece of the puzzle is making sure developers are on board with all the new stuff, and Build is where Microsoft will push that message. Things get kicked off in just a bit, so keep it locked here on Gear Live for live coverage of the Day One Keynote!

Steve Ballmer kicks off the event by sending his best wishes to those displaced by Hurricane Sandy.

He sets the stage by saying that Build 2012 sold out in 53 minutes.

Today is Tuesday. Friday was the first day of availability for Windows Phone 8 and Surface. In just the last 3 days, Microsoft has sold 4 million Windows 8 upgrades, in addition to tens of millions of upgrades to corporate customers. He goes through quotes from Staples, HP, and Dixons, all of which are naturally positive.

Ballmer moves on to reviews from CNET, Geek.com, Associated Press, and others, all of which mention the new hotness in Windows 8, the new Windows Phone 8 devices, and Surface.

The three biggest events were: the launch of the IBM PC, the launch of Windows 95, and the launch of Windows 8 and Windows Phone 8. Microsoft sees this launch as the biggest moment in the past 17 years. Windows 8 developers are at the forefront of being able to create something "absolutely fantastic."

Windows 8 brings "the best PC ever - software, hardware, and platform. Laptop, desktop, and tablet. Touch, keyboard, and stylus."

"The new Windows Phone 8  devices are the best phone to own, if you own a Windows 8 PC. If you want the experience that is most personal, you will buy a Windows Phone. And if you want what is the most killer hardware, you will find it in the Windows Phone form factor."

Microsoft is really focusing on the personalization of the Windows 8 and Windows Phone 8 platform. That's with good reason, as that really comes to the forefront when you use those pieces of software.

IE 10 is very fast, fluid, and touch-optimized, allowing developers to build "more exciting web experiences on the full range of Windows 8 devices."

"The creativity of your application is a function not only of your software, service, but also the hardware that it sits on."

Demo time. Ballmer is using an 82-inch Windows 8 slate, which drew chuckles from the crowd. He shows how picture password works, which we think is a great idea. He finds a tweet that mentions him in a foreign language in his Start menu. He gives us a tour through Bing Maps, and goes into OneNote and makes some changes to a note with a stylus. He explains that it will sync to the other devices on stage immediately through SkyDrive.

Ballmer moves on to another Windows 8 PC, a Dell XPS One all-in-one. He is performing a search for "Jessica Alba", who helped launch Windows Phone 8 yesterday. He finds her in Xbox Movies, finds an image of her in his SkyDrive, then finds her in Bing News, which creates a virtual newspaper on the fly. He chooses an article about Alba, and then shows how easily you can share using the Windows 8 Charms. Finally, he changes his lock screen wallpaper, and it changes on the other devices automatically.

Moving on to Windows Phone, Steve goes through the line-up. Nokia Lumia 920, HTC 8X, and Samsung ATIV Odyssey. He opens OneNote on the Lumia 920 and shows how the changes he made on the Windows 8 PC synced over to the Phone.

Next up is the ASUS VIVO, a 1.15 pound tablet with ARM Tegra processor. He says it's light enough to throw to someone in the front row, but "since it's logged into my email, I'm not gonna do that!" He pulls up a Bing Sports search and finds the San Francisco Giants. He pins it to the Start Menu, showing how easy it is for a consumer to always have their favorite sports teams readily available.

Next is the Microsoft Surface. He shows Microsoft Office, pulling up Microsoft Word. He explains that he isn't a touch typist, and then uses the Touch Cover, showing that this is an expression of the PC meeting the tablet. Surface is "great for work, but also great for play." He launches Xbox Music, and reiterates that every Windows 8 device gets free streaming through Xbox Music. After asking for song recomendations from the crowd, Ballmer goes with "Beautiful Day" by U2.

The Lenovo ThinkPad Tablet 2 is next. It has an Intel Atom processor, which means that it can run all Windows programs rather than just the modern RT apps. Still super-thin and light, and has a built-in stylus. To demonstrate, he adds more notes on the Tablet 2 to demonstrate more SkyDrive roaming and syncing. This one hits stores in the next month.

The Acer Aspire S7-191 is next, weighing in at 2.38 pounds with a Core i7. Thin and light, running full Windows 8. In addition, it's touch-based. Ballmer says touch laptops are cool, and people are asking for them. He gives a look at Visual Studio running on the Aspire S7, showing that you can develop, test, and host all on the same machine.

MSN for Windows 8 is up next, showing that it is optimized for IE 10 and for touch. Ballmer's point is that it isn't just about apps, but IE 10 is ready for touch-based websites.

Microsoft is all in with Windows 8, even with Xbox. We get a video showing off Xbox SmartGlass.

Steven Guggenheimer, Corporate VP of Developer & Platform Evangelism, takes the stage to show off some applications. He starts with Agent P, a Phineas & Ferb title. He shows how you can play the game with touch, or click in with a Touch Cover and play using the keyboard. He switches it up again and plugs in a USB Xbox 360 controller right into the Surface, and is playing the game with the controller.

He switches out to Skype and pulls up a video chat, and has the Skype session docked with Agent P running alongside it all at once.

Now demonstrating in-app advertising and sales, inserting a tile advertisement right in the app. Using Fish with Attitude, which has an in-app store, we see you can use the Microsoft payment engine, but they also allow third-parties like PayPal, or your own commerce engine. Definitely much more open than Apple's App Store payments, which only allows using your Apple ID.

Michael Bayle of ESPN takes the stage to show off the ESPN Windows 8 app. It brings all the content into one place. We are getting our first public look at the ESPN app, which syncs with your ESPN preferences. All major sports and all teams are available, as well as ESPN podcasts, video clips, and more.

Steve Ballmer back out, mentions that Twitter is now building a Windows 8 app, in addition to Dropbox and SAP.

Ballmer expects a lot of growth and vitality in the PC market, and there will be 400 million new Windows 8 devices over the next year even if the market stays flat. Windows Phone is a "small volume player" with a different approach to the market, and Windows 8 will encourage phone sales. More marketing for Windows 8, Windows Phone, and Surface. You won't pick up a magazine, newspaper, web page, or turn on the television without seeing a Windows 8 or Windows Phone 8 advertisement. Huge marketing push.

"This is the best opportunity that software developers will see" and Microsoft will stand behind the product.

To show Microsoft is all in, every Build attendee gets 100GB of SkyDrive storage for free, as well as a new Microsoft Surface RT 32GB with Touch Cover.