“A study conducted by Microsoft Research shows that consumers can process results with images 20% faster than text only results,” Microsoft’s Todd Schwartz explained. “So it’s clear that images play a big part in helping consumers with a variety of search activities….Visual Search allows you to quickly scroll through the galleries or do a one-click refinement using the quick tabs on the left, which are specifically relevant to the type of results you are browsing through.”

Think of Microsoft’s innovation as iTunes Cover Flow for search. And though it currently works only for mainstream queries (celebrities, dog breeds, iPhone apps, FBI’s Most Wanted, etc.) it’s quite impressive. And if Microsoft (MSFT) works quickly to extend it beyond its currently limited purview, Visual Search could do much to differentiate Bing from Google (GOOG). Certainly, Google doesn’t offer anything quite like it at the moment.

THIS internet was serious business, yes I was behind a proxy, only one, if this … ever got to the FBI I was f–ked.”

– Excerpt from a message posted to 4chan.org by someone claiming to have hacked into Gov. Sarah Palin’s Yahoo Mail account

Five years in prison, a $250,000 fine and a three-year term of supervised release. That’s the maximum sentence facing the Tennessee college student who was indicted today on charges that he broke into Gov. Sarah Palin’s private email account last month. According to a statement from the FBI, David C. Kernell–an economics major at the University of Tennessee and the son of Tennessee state legislator Mike Kernell–was indicted by a federal grand jury for “gaining unlawful access to stored communications and obtaining information from a protected computer via interstate communication,” or as the McCain campaign described it, “a shocking invasion of the Governor’s privacy and a violation of the law.”

Kernell entered the not guilty plea at the hearing and was released on bond with the following conditions:

• He may not leave the Eastern District of Tennessee without court permission.
• He may not possess a computer.
• He may use the Internet for classwork only.
• He may not have any contact with Gov. Sarah Palin or her family.

A trial date has been set for Dec. 16.

In a status report filed with Federal antitrust regulators yesterday, Microsoft (MSFT) said it had done much to comply with its 2002 antitrust consent decree and generally applauded its efforts toward interoperability and fair competition.

In the states, perhaps. But apparently not in Asia. Because not 24 hours later, China’s State Intellectual Property Office said it’s investigating the software giant for discriminatory pricing. And according to the Shanghai Securities News, it may sue Microsoft under a new antitrust law scheduled to go into effect Aug. 1.

“On the one hand, global software firms, taking advantage of their monopoly position, set unreasonably high prices for genuine software, while on the other hand, they criticize Chinese for poor copyright awareness,” an unnamed source told the publication. “This is abnormal. With the anti-monopoly law in place, [the] Chinese government and companies have the obligation and right to correct the situation.”

Of course, it’s also “abnormal” for Windows Vista to be priced at $2.50 a copy, yet copies of the OS are widely available in China at that price. Syndicates that distribute more than $2 billion worth of counterfeit Microsoft software aren’t exactly normal either, but you’ll find those in China as well. The FBI did. Which is not to say that China is wrong to complain of Microsoft’s unreasonably high prices–just laughably vindictive in the way it’s gone about it.

That’s a good question to ask in light of FBI Director Robert Mueller’s call for “omnibus” Internet surveillance. In testimony to the Judiciary Committee of the House of Representatives on Wednesday, Mueller suggested legislation be passed that would give the bureau the right to monitor the Internet at the backbone level.

Said Mueller: “I think legislation has to be developed that balances on one hand, the privacy rights of the individual who are receiving the information, but on the other hand, given the technology, the necessity of having some omnibus search capability utilizing filters that would identify the illegal activity as it comes through and give us the ability to preempt that illegal activity where it comes through a choke point as opposed to the point where it is diffuse on the Internet.”

Shades of Carnivore, right? The “choke point” to which Mueller alludes is presumably the National Security Agency, which has been probing the data passing through the Internet backbone like some Orwellian spinal surgeon. Which is a little frightening. Because the packets of data being passed back and forth over the Internet don’t come prelabeled. There’s no “ILLEGAL ACTIVITY” designation. It’s just activity, and Mueller would apparently like permission to survey it all.

While respecting the privacy rights of the individual, of course. Thoughtful.

The email was sent over a newly made Gmail account, from overseas in a foreign country. Seeing as you’re too stupid to trace the email back lets [sic] get serious,” he taunted in another. “Maybe you should hire Bill Gates to tell you that it is coming from Italy. HAHAHA. Oh wait. I already told you that it’s coming from Italy.”

–Bomb hoaxer Josh Glazebrook

Now that the FBI has made “significant progress in decreasing the rate of loss for … laptops,” it can get on with the much more important business of using them to nab bad guys. Bad guys like former Timberline High School student Josh Glazebrook of Lacey, Wash., who pleaded guilty to emailing bomb threats and other charges after the bureau tracked him down with a piece of spyware called a Computer and Internet Protocol Address Verifier, or CIPAV. A remotely installed application, CIPAV logs a computer’s Internet protocol address, its open TCP and UDP ports, the type and serial number of the operating system it’s running, the registered user of that operating system, and that user’s login name, and then it sends them all along to the government.

Just how the FBI managed to install CIPAV on Glazebrook’s computer is anyone’s guess. Perhaps the bureau convinced security software makers to white-list the application so it could operate undetected. Or perhaps it exploited an unknown vulnerability in Windows. Of those two explanations, it’s the latter that seems most plausible. “It’s quite possible the FBI knows about vulnerabilities that have not been disclosed to the rest of the world,” Roger Thompson, CTO of security vendor Exploit Prevention Labs, told Wired. “If they had discovered one, they would not have disclosed it, and that would be a great way to get stuff on people’s computer. Then I guess they can bug whoever they want.”

Now he faces a three-year prison sentence and the prospect of Hollywood waving his piked head about as a warning to all would-be copyright violators. “The FBI makes this a different ball game,” said Jay Cooper, an attorney at Greenberg Traurig who specializes in intellectual-property issues. “The public doesn’t seem to get that it’s wrong, and maybe a message like this has to get out there so people realize there are criminal penalties.”