WinFS is (more or less) dead, it has been announced on their official web blog:
http://blogs.msdn.com/winfs/archive/2006/06/23/644706.aspx
Some useful parts go to SQL Server development branch.
Reminds me of Cairo (early 90-ties), MSFT never achived that task.
Only some parts were integrated as ActiveDirectory in Win2k and
improved OLE in Win 9x/NT.
The Vista search seems to be very same technology as it has been
shipped with WinNT 5.0+ (but deactivated by default). Just a new
frontend has been added which looks more confusing than the WinXP
variant.
The channel9 videos featuring WinFS looks promising, although I heard
(from beta1 testers) the technology was not .