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an interesting account of the early development of windows by one of
the participants:
http://weblogs.asp.net/larryosterman/archive/2005/02/02/365635.aspx

an extended excerpt:

Davids job was to move the graphics drivers in windows into protected
mode on 286 and better processors (to free up precious memory below
640K for Windows applications).  He (and Chuck) had already figured
out how to get normal Windows applications to use expanded memory for
their code and data, but now he was tackling a harder  problem - the
protected mode environment is subtler than expanded memory - if you
touched memory that wasn't yours, you'd crash.

David succeeded (of course).  But David, being David, didn't stop with
the graphics drivers.

He (along with Murray Sargent, creator of the SST debugger) also
figured out how to get normal Windows applications running in
protected mode.

Which totally and utterly and irrevocably blew apart the 640K memory barrier.

I remember wandering over to the Windows group over in Building 3 to
talk to Aaron Reynolds about something to do with the MS-DOS
redirector (I was working on DOS Lan Manager at the time).  I ran into
David, and he called me into his office "Hey, look at what I've got
working!".

He showed me existing windows apps running in protected mode on the
286.  UNMODIFIED Windows 1.0 applications running in protected mode.

He then ran me around the rest of the group, and they showed me the
other stuff they were working on.  Ralph had written a new driver
architecture called VxD.  Aaron had done something astonishing (I'm
not sure what).  They had display drivers that could display 256 color
bitmaps on the screen (the best OS/2 could do at the time was 16
colors).

My jaw was dropping lower and lower as I moved from office to office. 
"Oh my goodness, you can't let Steve see this, he's going to pitch a
fit" (those aren't quite the words I used, but this is a family blog).

You see, at this time, Microsoft's systems division was 100% focused
on OS/2 1.1.  All of the efforts of the systems division were totally
invested in OS/2 development.  We had invested literally tens of
millions of dollars on OS/2, because we knew that it was the future
for Microsoft.  OS/2 at the time just ran a single DOS application at
a time, and it had only just recently gotten a GUI (in 1989).  It
didn't have support for many printers (only about 5, all made by IBM,
and (I believe) the HP Laserjet).

And here was this little skunkworks project in building three that was
sitting on what was clearly the most explosive product Microsoft had
ever produced.  It was blindingly obvious, even at that early date -
Windows 3.0 ran multiple DOS applications in virtual x86 machines.  It
ran Windows applications in protected mode, breaking the 640K memory
barrier.  It had a device driver model that allowed for development of
true 32bit device drivers.  It supported modern displays with color
depths greater than had been available on PC operating systems.

There was just no comparison between the two platforms - if they had
to compete head-to-head, Windows 3.0 would win hands down.

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