Right. They have ten years of .NET penetration into the corporate world, the web, and 3rd party application developers - plus four years of .NET integration right into their operating systems.

It is running on everything from embedded systems, to phones, to desktops, to clusters. Throw in that all the hardware vendors who are interested in "the Next Windows" and Microsoft has just laid out a roadmap for the next ten years.

The real magic is probably the Windows app store and new app packaging format that are also expected to be introduced with Windows 8. I'd imagine apps will be required to support both ARM and x86.

No, they explicitly stated that their demonstration did not consist of virtualized or emulated x86 Windows. That doesn't at all rule out a dynamic translation layer for x86 apps.