An operating system that runs everything as a virtualized machine could be one of the most significant and beneficial steps Microsoft has ever taken in the continuing development of the Windows platform. Plus, there is evidence, going all the way back to the early days of Windows 7, that this is the exact direction Microsoft has been going in all along.
While these are mostly minor changes that do not get to the true core of the OS, they do, in their small way, help clear the path for Windows 8 to become the first fully virtualized Windows. I also have a theory that Microsoft has been working to reduce the size of the core OS dramatically (though the company has gone on record, saying it hates to talk about the kernel) and, even as it adds features and functionality to the interface, make it smaller, too. If you look at what's possible on 1MB Web pages, you can see that everything Microsoft is doing on Windows 7 is little more than calls to the core OS with some lightweight graphics work on the front end. Even flashier features, like see-through panes, are really off-loaded to powerful graphics CPUs.
My point is that Windows 8 can, essentially, be a lightweight core (or kernel) and even a lighter-weight interface. Everything else can be a virtual machine.
