The next version of Windows is going to run on ARM processors - the same kind of chips that's inside a bajillion smartphones and tablets right now. Which means the future of Windows isn't just PCs anymore.
What does this mean?
Well, most simply, it means the full Windows shebang you know and love (or loathe) from your PC can now run on tinier computers that use way less power - ones using ARM chips that are common in smartphones right now. Think tablets. And other wacky, smaller form factors. But you know, with all-day battery life.
Microsoft showed how this new Windows, running on an ARM chip that you might find inside a cutting edge Android tablet can slice and dice full HD video, run Powerpoint and do fancy graphics tricks in Internet Explorer with no problem. Microsoft even said it'll have full DirectX powers for games. Basically, everything you'd expect to do in Windows. But now in lots more places.
What Microsoft didn't talk about is what this new Windows will look like when it's on these new tablets and sliders and other fantastical permutations of PCs. Presumably, it'll look different. Somehow. Hopefully. Or when it'll come out. They also won't say what it's called.
So all of my Windows apps will just work on this new, mobiler Windows?
Ehhh. Microsoft wouldn't say how or if it would happen, but ominously, Head Windows Dude Sinofsky noted, "It's definitely the case that x86 programs [i.e. the ones on Windows now]don't run on ARM." And to get those running, Microsoft won't be using "virtualisation or something like that", since the low-power ARM chips aren't really suited for that kind of work. Which means either Microsoft has another trick up its sleeve (hopefully) to run current programs on this new, ARMier Windows. Or it's not going to happen. But that seems to defeat the point of porting Windows to ARM, in some ways.
Another point is that devices won't just work either - manufacturers are gonna have to write new drivers for 'em.
Is regular old Windows going away?
Nope. It'll run on old-school x86 chips from Intel and AMD and the like. It'll just run on these ARM chips too. How Microsoft is going to differentiate them, from the branding to the interface to the features, we don't know yet. Microsoft is very much emphasising that this is just a "tech demo" to show that they have Windows running on ARM chips right now.
Does that mean the sweet Windows Phone OS won't be on a tablet?
Probably not. The Microsoft philosophy is, "Small screen is windows phone. These screens are Windows 7." So the future of tablets (and other things with slightly-bigger-than-phone screens) for Microsoft is very much still Windows. Conversely, it means for the future of Windows isn't just PCs anymore. Though we're not exactly sure what that means yet. [Microsoft]