A timely snapshot from Paul Thurrott -- excerpt:
Here's what we do know. Windows 7 can and should be considered Vista Release 2 (R2). In fact, I think Microsoft should market the business versions of the OS under that very name. Beginning with the release of Vista SP1 and Windows Server 2008, Microsoft no longer forks its Windows code tree for new releases. So the next versions of Windows client (7), Windows Server (2008 R2), and Windows Home Server (WHS) will all be based from exactly the same code. Microsoft will simply combine the right components to create the Windows version it wants and ship it. It's a much simpler system than before.
In fact, at least one Microsoftie, speaking off the record during my trip to Redmond last week, explained that Windows 7, in many ways, would simply be Vista SP2. From a compatibility standpoint, all the work Microsoft is doing will show up in Vista first and will work identically in Windows 7. It's not changing the underlying platform at all, so if a hardware device or software application works on Vista, it will work fine on 7 as well.
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