The only thing they really seem to be "gutting" is WinFS, by pushing it back (at least) a year to coincide with Longhorn Server. This, IMHO is a good thing, as I think WinFS will be much more useful across a network and with shared WinFS stores.

It looks like Avalon (new vector based graphics/UI system) will be backported to XP so application developers can target an increased (ie: existing) install base with the new technology.

I think Indigo (networking and web services stuff) was already meant to be backported, even to Windows 2000. It might even be released before Longhorn.

I'm sure there will be more casualties as the ship date draws nearer, but excepting the WinFS delay, I'm liking their new plan better so far.

</shill>