Yes but if we are talking about Windows list price is $500 - so ROM costs are pretty insignificant.
Will probably be factored into the end cost with an outrageous multiplier, though...
Regarding updates - ROM based would mean that there would be more incentive to get it right in the first place! Also there would be less need for security updates (which are the majority).
I wonder if we'll ever see that, really - almost seems unthinkable to get it right in the first place with modern software, especially something as complex as an operating system
...and a (non-flash) ROM-based approach means that if
something needs to be fixed, the fix release cycle will be much longer than it is today.
The other big advantage is an almost instantaneous boot process!
Dunno about that, really - a very big time of booting systems are spent on BIOS initialization and device init... but other than that, sure, ROM ought
to have faster read and lower seek-time than a harddrive
There's also the issue of ROM size, by the way... Vista-on-chip, anyone? :p
But it's an interesting idea, and afaik Microsoft has gone to some lengths to make the windows kernel ROMable (ie, running directly from ROM instead of having to be copied to RAM first). Having the very core part of the kernel and a few boot-time drivers in ROM doesn't seem like a particularly bad idea to me, except that it means even more os-vendor lockin than we have to day.