A lot of people are hoping that Windows 7 will be a revolutionary product, much like the Mac OS/X was. However, I don't think so. Microsoft has a history of spit-and-polish when it comes to OSs. There was Windows 3.0 then Windows 3.1. Then there was Windows 95 followed by Windows 98, and Window NT 3 followed by NT 4. Then there was Windows 2000 followed by Windows XP. And now we have Vista, which I expect to be followed by Windows 7, with the revolutionary product to follow 3 or so years later.
A comparison might be drawn with Intel, who have a similar policy with their CPUs: an inital release followed by a die-shrink.
So, Windows 7 will be a polish of Vista. What can we expect to see? A significant reform of Aero and UAC - making them much faster, for a start. With the introduction of Windows Home Server, I see an opportunity for MS to rationalise the SKUs. Instead of the plethora of products we have to day, I hope we'll return to just the one, Windows Workstation. Connect it to a Home Server and it becomes a home client; connect it to an Active Directory and it becomes a Business Client. There will be extra polish with DX 11 and physics, of course.
With Windows 7, matters are complicated further because Vista is a transition product for moving from 32 bit to 64 bit, and ISVs aren't following suit. As yet, there's no 64 bit Flash, no 64 bit Acrobat Reader. Indeed, 64 bit utilities are only just beginning to appear. I'd like to see Windows 7 being purely 64 bit - it would save Microsoft a lot of work to ditch the 32 bit versions - but with the amount of 32 bit software around, I just don't see that happenning, and the 32 bit / 64 bit dichotomy will confuse many users.