I was surprised not to see mention of this here previously. It looks like WinFS, which had been moved from a core Longhorn component to a post-release Vista upgrade some time ago, has now been essentially cancelled. Or at least the part that matters to an end user like me.
... some of the technology, especially the end user value points, are not ready...
http://blogs.msdn.com/winfs/I want my end user value points!

So does anyone else see this as a big opportunity for some other OS to step in and actually make this work? I would be completely unsurprised if Apple actually did this and A: it might make me finally move over to a Mac, B: it would be a brilliant lock-in technique to counter the new Bootcamp "buy a Mac and run Windows" trend that seems to be happening (although since Apple makes tidy profit on its hardware I doubt they're bothered). If the files were portable but the meta data and organizational structure wasn't, sure you *could* go back to a regular PC, but you'd be losing sooo much valuable info and categorization. Who would want to?
But then there's the question of whether this was ever really that great a thing anyway. It seems like more and more apps and online ventures are taking to keywords and tags. Perhaps at some point all apps that needed such organizational structures will implement them natively rather than at the OS level? Perhaps. But doesn't that seem like a waste of lots of programmer's time? And isn't the lack of consistency in implementation going to be annoying?
And what about where apps like Locate, X1, etc. fit into this? Do such rapid searching systems make this "folderless file system" unnecessary? Again, perhaps. But they don't solve hte meta data problem. A big part of what I wanted to be able to do was embed - either manually or, preferably, automatically - data into most every file I saved specifying, for example, the URL it was downloaded from and notes about why I downloaded it. Now an app like Locate could add this functionality but will it be as seamless and consistent as it could have been with WinFS? I guess we'll never know, or at least not for a while yet.
*sigh*
So Vista is now almost completely uninteresting to me.

- Oshyan