Microsoft has announced that WinFS, the relational filesystem planned to be one of the core parts of Vista, has ended active development. Parts of the code will find their way to other projects, but WinFS itself is not going to see the light of day.
WinFS was designed as a relational overlay to a filesystem, allowing applications to find and share each others' data more easily, in an operating systems' analogue to the Java Content Repository.
This is a majour loss for Microsoft, in many ways; they've been coding and evangelizing this technology for close to ten years. The survival of some of the code makes it not a total loss, but it's still a problem for them, considering that they were showing off features of the filesystem at TechEd 2006, only a few weeks ago.
Ted Roche has some interesting commentary
Yet another disappointment. The best lesson to walk away with is that you can never count on commercial software that hasn't shipped yet. There are a vast array of shipping file systems you can consider. If you have a need for a relational database interface to a file system, you could look at Gnome Virtual File System, the Be File System (written by two guys in 1996 over 10 months), Apple's Hierarchical File System Plus (1998) -- interestingly, the file system of the iPod. For a deep backgrounder, Wikipedia has an interesting and heavily annotated article on File Systems.
It also points to another advantage of Open Source and the principle of "ship early, ship often." If an Open Source project wasn't going the way you wanted, you can fork the code and create a new project following your directions (with proper attention to the original licenses involved, of course). You might search SourceForge.net for "database file system" and see if there's anything of interest. Seems like plenty of neat stuff.