Microsoft's Virtual Earth 3D, released yesterday, looks to truly blow Google Earth out of the water. It currently features computer-rendered versions of 15 US cities with a stunning realism. Check out this high-res image of San Jose (from the Mercury News).

When I first clicked, I thought it was just an aerial shot. What's the big deal? Then I realized it was rendered. MS general manager Steve Lawler explained to the Merc:

Lawler, who heads Virtual Earth's team of research scientists and engineers, said the cities are built using automated computer algorithms that extract precise architectural features and measurements from images taken by airplanes flying over the cities and trucks driving the streets.

Lawler said the average cost of producing a city was $150,000, which he said was about one-tenth the cost of current manual methods.

The bad part: a download and Windows and IE6/7 required. I don't think you can do this in a generic browser. Yet.

Just like the real world, Microsoft's virtual world is up for sale. Fox, Zip Realty and Nissan are participating in the launch.

`We are just going to experiment at first,'' Lawler said. ``You can imagine a billboard on SBC Park and you click it and get tickets to the ball game. . . . You can imagine a Nike `Just Do It' ad on top of Mount Rainier.''

Yuk.