Ballmer and Gates promise a late 2009 release of Windows 7 (and not a minute too soon). Here's a brief look at the UI.
Video: Multi-Touch in Windows 7
I think it looks good, but I don't like the idea of reaching over my keyboard to the screen -- I think it needs to be a tablet PC to really enjoy the multi-touch screen, not unlike the Microsoft Surface product. (Of course it works well on the iPhone, too.) I also wonder how it'll work for handicapped people -- those missing fingers, hands, or even just tremors.