I think that most of the cost is due to the cost to employ thousands of engineers, developers and testers that produce a quality Operating System like XP, Vista, 7.

Bill Gates said that the estimated cost to produce Windows Vista was $6 Billion. And after spending $6 Billion to develop Vista, he said "Best $6 billion I ever spent."... Vista really is a good OS, it gets a bad rap, if you can embrace the change, and look past the original release issues with compatibility and driver availability, then it's a great OS.

If you don't want to pay for an OS, then go illegal (and don't degrade the product or bitch) or go with a Linux disrto...