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Windows XP includes a registry key that prevents PCs from dropping down to S3 sleep mode when USB KB/Mouse devices are detected. Microsoft implemented this setting by default because some hardware won't be able to wake from S3 mode if a USB keyboard and mouse are plugged in.
This registry file enables you to modify that setting if you determine that your hardware can safely support S3 mode. For details on Windows XP power consumption issues, see the companion article "Debunking the Windows XP power wasting myth."
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