Later today, Australian time, Microsoft chief Steve Ballmer will climb onto the stage at the Mobile World Congress in Barcelona and take the wraps off his company’s new mobile operating system – and he’d better put on an impressive show.

Microsoft has been struggling in the highly competitive mobile device market, gradually losing market share to the likes of Apple, RIM and Nokia.

The company’s previous attempts at making its mobile OS more attractive have been largely greeted with yawns. And when you sit any Windows Mobile-powered device next to an iPhone, it’s easy to see why.

Windows Mobile’s clunky interface has even prompted handset vendors such as HTC to try hiding it underneath their own interface.

While this improves things to a degree – like lipstick on a pig – it doesn’t take much time with the handset to become acutely aware that it's Windows Mobile still lurking at its heart.

So just what will Ballmer show off today when he appears in front of crowds on the show’s opening day?

According to some industry predictions, Windows Mobile 7 is going to have an interface based on Microsoft’s Zune music player. Some mobile watchers are even predicting Microsoft will come out with a Zune phone, pitting it directly against Apple’s iPhone.

Microsoft’s big sell for Windows Mobile has always been that it makes it easy to tie mobile devices to corporate IT infrastructures. But that argument is no longer as compelling as it once was, as IT departments have been happily connecting everything from iPhones to Blackberrys to their networks for some time.

For Windows Mobile 7 to help Microsoft claw its way back into the mobile device game, it’s going to have to go beyond its traditional ‘connection’ message and show that the OS is still relevant in the rapidly evolving mobile handset space.

Will Ballmer have something really compelling, or just more of the same? Either way, it’s going be interesting to watch.