WinFS was earlier hyped as the perhaps best and biggest improvement with Windows Vista. Since then it has turned out that the two was not developed together but as parallel projects and after that it turned out that Vista would actually not contain WinFS from scratch but that it would eventually be released later on, but that support for WinFS would be available with Vista. Now things have changed once again as WinFS will not be available as a single product but only as a part of Microsoft’s coming SQL Server (a.k.a. Katmai).
This since it has recognized the strong connection between Katmai, ADO.net and WinFS, so the best thing would be to keep them close together. WinFS is still under development and that we would later have a version with the possibility to run Windows with is not at all impossible.
WinFS beta 2 will not be made available like beta 1 was either. When we, the consumers, will se a WinFS application is impossible to tell, but that that it will take a long time after that Windows Vista has been launched.