The move came two days after the company controversially delayed the release of Windows Vista, hinting that it needed more security work. Microsoft security chief, Mike Nash, is among those being shuffled, though his destination is unclear.

The Platforms & Services Division, which has overseen client, server, tools and MSN businesses since its formation last September, will continue to be led by Kevin Johnson, who has shares the post with soon-to-retire Jim Allchin.

It was Allchin who broke the news of Vista’s delay on Tuesday. While he is still on plan to retire as soon as Vista hits the shelves, Steven Sinofsky has been brought in immediately to take over development of post-Vista versions of Windows.

Sinofsky will head up the new Windows and Windows Live Group as senior vice president. He has been in Microsoft’s Office group for the last decade, and Microsoft credits him with evolving Office from suite to system.

It looks like Sinofsky’s group will be in charge of blurring the lines between Windows Live web services and the traditional Windows desktop, with a focus on the experience and software-based services.

The Core Operating System Division, which builds the hard technical OS pieces of Windows, remains under the lead of Brian Valentine.

But within COSD, security head Mike Nash is being replaced by Ben Fathi, and Nash’s next post is yet to be announced. Whether it is also yet to be decided remains to be seen. Some see security as the reason Vista slipped into 2007.

A new Windows Live Platform Group will focus on the back-end infrastructure for Windows Live, including support for third parties services and monetization. It will be led by corporate vice president Blake Irving.

A new Online Business Group will also look at ad sales, biz dev and marketing for Microsoft’s online services. David Cole, senior vice president, will lead this group until he heads off on a leave of absence at the end of next month.

Under this unit, Yusuf Mehdi, senior vice president and former head of MSN, has been named chief advertising strategist, reporting directly to Johnson.

A new Market Expansion Group will be headed by Will Poole and will focus on emerging markets and new form factors, through products including Windows XP Starter Edition, which is aimed at developing nations, and Ultra-Mobile PCs.

The Windows Client Marketing Group will continue to be led by Mike Sievert. The Server and Tools Business Group will continue to be headed by Bob Muglia. Sanjay Parthasarathy remains in charge of the Developer and Platform Evangelism Group.