A brief explanation of what is happening to WinFS
A number of my early adopters have been asking me about WinFS and the announcement we made on June 23rd. In short WinFS will not be released as a stand alone product - but several strands of the technology that were part of WinFS will appear - most obviously in the next version of SQL Server (codename Katmai). I would recommend you check out the following blog and article for more background and detail.