The extent to which I am excited about WinFS cannot be over-stated. Haven’t you always wanted to find your data based on what it IS rather then where you put it? It’s coming. Too bal it isn’t there (really) in the PDC bits of Longhorn.
This kind of stuff is hard to conceptualize… but think about what it would be like if connecting your digital camera to your PC didn’t just upload your photos… what if it automatically associated those photos with appointments in your calendar (photos from Rachel’s birthday party) or used facial recognition technology to associate it with contacts (Pictures of my sister). This is powerful stuff.