I've done that with hardware that got installed in a factory.

Why not? You pay a one-time, small license fee, you get years of free support from a major company, I don't have to document all the details of my stripped down kernel and how to recreate it, you can hire anybody off the street to work on it long after I am gone (and I am long gone from that company, but the hardware lives on), they didn't have to pay me to build out a unique OS, the low power computer we had could more than handle XP, there was (and continues to be) continued new, unknown requirements and upgrades, the people required to occasionally touch the interface had more PC experience than for any embedded or linux OS, and on and on.

Why wouldn't I slap a copy of XP on there? Well, this story is the counter-argument, of course. I still think it was the right decision.

Assuming the developers had half a clue, they don't. They run Windows XP Embedded which can be stripped back to just the kernel and a serial terminal if necessary. It's not like they take a retail XP CDROM and installed it (of course, in the absence of clue this works too...)

It is not necessarily a full-blown XP - it might be XP Embedded, which looks like XP, but is highly componentized to reduce requirements to the hardware or improve on security.

In either case, I don't understand why ATM industry should be pissed - it's not that they were patching ATMs on a regular basis... In case of XP Embedded the patching story is even more convoluted.

I guess that's because back in the 90s there were no practical alternatives to NT and OS/2, then NT4 won. XP was an obvious migration path for the old NT embedded software.

Largely because many of them need to display advertisements these days. I've seen ATMs in gas stations that were displaying ads for the type of stuff you'd find in a gas station/convenience store. The rest I've seen advertising services of the bank they are attached to.