Well I am not happy with some of the things they are saying, some I have been expecting but here are my issues:

1) Expression Design:  a great tool for talking a Photoshop file and pulling out some of the layers to create xaml to use in VS and Blend, if they are not creating any new updates then as Photoshop file format changes what tool will replace that function ?

2) Expression Web Super Preview :  great tool for side by side checking of html / web site rendering

will we still have that in some form or is that just dead now ?

3) Expression Web:   sometimes I preferred to tinker with CSS in this tool as it's UI and way of working were a bit different than VS and was useful for that.

I hope that the merge of tools manages to keep the advanced bits of blend working in VS or I will have to keep using the old blend until xaml is really gone...