“Velocity” is a project codename for Microsoft's distributed in-memory application cache platform. With Velocity, architects and developers can create scalable, available, and high-performance applications. You can find more info on "Velocity" from the MSDN whitepaper Microsoft Project Code Named “Velocity”.
You may find two sessions useful: Project "Velocity": A First Look and Project "Velocity": Under the Hood. They are available at the PDC 2008 web site at https://sessions.microsoftpdc.com/public/timeline.aspx
It is currently in CTP 2 release and V1 will be available in Mid 2009 according to the current schedule.