I know this may be an old news but still  check this out at microsoft site.
 
Why Microsoft Windows XP Embedded and Not Embedded Linux?
 
 
 

Selecting an operating system (OS) platform is one of the first decisions an embedded developer must make for any given device design. Whether you are considering migrating from a proprietary to commercial platform, or from one commercial platform to another, the objectives are the same: accelerated time to market; a solid, extensible OS core that can be used across all projects; superior technologies that support differentiation and address emerging opportunities; and predictability over the device lifecycle. In addition, you want it at the lowest possible total cost from a reputable vendor who will support you throughout the process.

For smart, connected, 32-bit devices requiring rich applications, Microsoft� Windows� XP Embedded delivers six distinct advantages over Linux in the embedded space:

  • Integrated: An all-inclusive, tool set that delivers faster OS and application development time
  • Comprehensive: An OS foundation with proven performance and reliability
  • Unmatched: A technology portfolio for building the next generation of devices
  • Interoperable: Broad interoperability with Microsoft� .NET� enabled applications and services that span devices, PCs, servers and the Web
  • Proven: A long-term business model that is better aligned with your business
  • Global: A worldwide system to support and speed overall product development

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