We have all seen something like this at one time or another, some of you may have even played with something similar at one point. I have never seen something so thoughtfully implemented however. If I had a Tablet PC (which I dearly desire) this would certainly be a VERY useful replacement for the current standard desktop.
The only thing that I am having some difficulty seeing is how the file names are denoted. A grouping of Word Documents (for instance) would all look very much alike in this layout. This is just a proof of concept though, so I am sure that they are addressing things like that.
As Tim Anderson points out in his post on this topic, it is going to be interesting to see what effect WPF has on moving more applications toward 3D as a replacement for 2D applications. Typically 3D has been something relegated to the world of designers and modellers, but it is looking more and more like Microsoft has done their homework and brought this capability into the hands of the everyday programmer.
Regardless, take a look & enjoy.