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FWIW, here's the Microsoft's source for isatty (in VC\crt\src\isatty.c):
/***
*int _isatty(handle) - check if handle is a device
*
*Purpose:
* Checks if the given handle is associated with a character device
* (terminal, console, printer, serial port)
*
*Entry:
* int handle - handle of file to be tested
*
*Exit:
* returns non-0 if handle refers to character device,
* returns 0 otherwise
*
*Exceptions:
*
*******************************************************************************/
int __cdecl _isatty (
 int fh
 )
{
#if defined (_DEBUG) && !defined (_SYSCRT)
 /* make sure we ask debugger only once and cache the answer */
 static int knownHandle = -1;
#endif /* defined (_DEBUG) && !defined (_SYSCRT) */
 /* see if file handle is valid, otherwise return FALSE */
 _CHECK_FH_RETURN(fh, EBADF, 0);
 _VALIDATE_RETURN((fh >= 0 && (unsigned)fh < (unsigned)_nhandle), EBADF, 0);
#if defined (_DEBUG) && !defined (_SYSCRT)
 if (knownHandle == -1) {
 knownHandle = DebuggerKnownHandle();
 }
 if (knownHandle) {
 return TRUE;
 }
#endif /* defined (_DEBUG) && !defined (_SYSCRT) */
 /* check file handle database to see if device bit set */
 return (int)(_osfile(fh) & FDEV);
}