Quentin Clark from the WinFS team makes some clarification on the post from last Friday, here's what he has to say:

Hi. Wow there has been a lot of, let’s say, interest in the posting Friday. I knew there would be interest, and I knew that the news that we would not ship WinFS as a separate thing would make news, but didn’t expect quite the thread lengths we are seeing! Whew.

Is WinFS dead?
Yes and No. Yes, we are not going to ship WinFS as a separate, monolithic software component. But the answer is also No - the vision remains alive and we are moving the technology forward. A lot of the technology really was database stuff – and we’re putting that into SQL and ADO. But some of the technology, especially the end user value points, are not ready, and we’re going to continue to work on that in incubation. Some or all of these technologies may be used by other Microsoft products going forward.

Will the "Relational Filesystem" ever be in Windows?
Hey – we are very busy finishing Vista, and just aren’t ready to talk about what comes next. The vision for a richer storage in Windows is very much alive. With the new tools for searching and organizing information in Windows Vista, we are taking a good step towards that vision.