Nearly a year ago Microsoft announced that WinFS, Microsofts next-generation file system (that is technically not a file system), would not be part of Windows Vista.
Since then, Microsoft has been quiet about the future of WinFS other than to say that it would be released after Windows Vista. Many of its practical elements, such as the ability to quickly find files and data on a PC, have been introduced into Windows Vista itself.
According to Mary Jo Foleys Microsoft Watch, Microsoft may be preparing to move full ahead again with new WinFS information at the upcoming Professional Developers Conference (PDC). Microsoft has not confirmed this, however.
WinFS is essentially an SQL database layer that sits on top of the NTFS file system. With it, files and data are abstracted and can be access not just more quickly but in many different ways. Some speculate that WinFS may first appear on the server edition of Windows Vista and when coupled with a WinFS enabled client, would allow seamless organization of files and data across a network.
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News source: Microsoft-Watch