This is awesome news!
I read the earlier threads on Channel9, quickly downloaded the 70odd meg WinFS Beta 1 and installed it on my XP machine (later installed in on the Vista partition as well).
I can see my WinFS share, but don't know what the heck it means and how to add files to it. I guess I better look at the help docs and the samples they have provided.
Can't wait for the demo .... Now would someone "release" another build for Vista and suprize us again!