<3 Media". Even other people's formats—notably Apple favourites H.264 and AAC—are supported in the new OS, which comes with the newest Windows Media Player, version 12. But the biggest multimedia upgrade is Play To, a little WMP feature that eclipses all the rest.
Windows Media Player
Windows Media Player is never going to be the prettiest girl in school, but Windows 7 gives it a few upgrades that definitely makes it more useful.
For starters, Windows 7 now supports more types of media files, now including AAC in the audio department, and H.264, DivX and Xvid in video, with no third-party download needed. It also supports all of the formats it did before, including the earlier MPEG stuff and of course anything Microsoft had a hand in, not just WMA and WMV, but VC-1, too. This ability to read so much comes in handy in Play To, obsessively covered down below.
New WMP Interface
Though we haven't dwelt on it, Windows Media Player's interface was subtly redesigned. Not only is there a neat pop-up mini music player for when you want to see what's playing but you're doing other stuff, there's also a new set of tabs on the right-hand side, including a Play, Burn and Sync. The differences are subtle at a glance, but for people who were heavy WMP11 users, this new version, WMP12, has much improved workflow. (Ars Technica did a nice detailed walkthrough of the new WMP interface, if you're interested.)
Speaking of "play," one of the most potentially groundbreaking features of Windows 7 is "Play To," the ability to send music, video and photos to any compatible devices on the network, without running any kind of proprietary software, and without any initial setup. Sending a song to a Sonos or a video to an Xbox is—theoretically—just a right-click away.
The reason things work so well in theory is that they all support DLNA standards for sharing content on a network. You right click a piece of content in Windows Media Player, select "Play To..." and up pops any and all devices that can be commandeered. The good news here is that any media "renderer"—be it a networked photo frame or a PS3—that ends up supporting the standard will be able to receive anything you hurl at it from your Windows 7 box, and you'll even be able to grab content from servers and other computers and play them on the renderer of your choice. The downside is that there will surely be good products that don't support the spec for one reason or another.
What devices work now?
In our testing, we sent music to the Sonos and sent certain video files to the Xbox, though only when the Xbox was running the Windows Media Center Extender software. There are currently a number of other compliant "play to" products—such as the Roku SoundBridge—but since the spec itself isn't finalized yet, it's hard to just run a list. The DLNA itself will soon be announcing compatible products as they either come to market or receive the appropriate firmware update.
As I mentioned, the computer can send media files to "renderers" around the network. At this point, it's not clear whether or not the computer can tell if the product can render the file—it sends whatever you tell it, and then returns an error if it can't be played. But soon, the computer itself will know the file compatibilities of devices on the network, and will transcode files on the fly if there's a better fit (say, from DivX to WMA). This stays in the "I'll believe it when I see it" file for now, but it's confirmed to be part of the deal.