So Microsoft just showcased the new Windows Shell at the D9 (AllThingsD) Conference the other day and the implications are huge. The real thrust of the demos were the new Windows UX for touch displays. It’s all based on the Metro UI with a Windows Media Center like overlay and it’s endgame is to blur the line between an embedded OS (like for a smartphone or an ARM tablet) to a more traditional OS for Slate PC’s, laptops and desktops.

Although the big thrust with the D9 and Comdex demos were multitouch integration into the OS (most likely to capitalize on the buzz surrounding Android and iOS) the real take away from these demos is that Microsoft is unifying their interfaces. Since WIndows XP, Microsoft’s included what they refer to as a ’10 foot experience’ with their OS’s in the form of Windows Media Center. MCE is a very powerful platform. Coupled with a supported remote control, MCE will turn your monitor (or an external TV display as I use) into a full fledged Media hub, complete with DVR, Internet TV… the works.

The problem with MCE is that most people ignore it outright. There’s a ton of reasons for this, arguably the main one is that since it’s been largely ignored by 3rd party developers since it’s not front and center in the Windows world. This isn’t completely MCE’s fault, especially since 3rd party consumer developers have left Windows with a reckless abandon for the greener apple fields and android pastures.

With Win8, we’re seeing Microsoft put this full screen MCE-like immersive experience front and center. They’ve glossed it up with some Metro like Windows Phone UX, and like OS X Lion, they’re overhauling the entire desktop OS with smartphone-like touches.

Micorosoft’s also throwing another curve ball at us, they’re saying that Windows 8 will also ship with ARM flavors. This is huge news, Windows has traditionally been developed around the x86 architecture. In the early aughts, Microsoft briefly supported Intel’s Itanianum instruction set to usher in 64 bit computing, but the industry quickly settled on AMD’s x64 extensions and Microsoft followed suit shortly thereafter.

ARM is a completely different beast from x64 and x86 and it’s thought that Microsoft had to practically rewrite the OS to support this new change. ARM generally handles power consumption better than it’s x86/64 brethren, however it does that by sacrificing computational power and (in the case of the current gen devices) the OS agnosticism of PC platforms, meaning that an Android based ARM device has very little shot of ever running MeGoo or Windows 8.

Windows 8 on ARM will have some limitations. For example, it won’t have a Rosetta like translation layer to run legacy programs. Meaning that traditional Windows 7 apps won’t run on your new 8 based tablet. From what I’ve been able to gather, they’re going to have the Explorer Shell with Windows 8 ARM (the traditional windows desktop) however we’re still a long ways out and that seems a little left-field to me.

So what’s the game plan for Microsoft? It’s no secret that Google and Apple have taken over the consumer electronic space with their device platforms. I own both an Android phone and tablet and they’ve fundamentally changed my relationship with my PC and technology in general. Microsoft hasn’t had any real response to this, so obviously this is MS’s answer to Apple circa 2007.

Clearly, the idea is that they want one OS to rule them all. They haven’t mentioned smartphones specifically with Windows 8, but I wouldn’t be surprised if Windows Phone 8 devices didn’t all have a Mini HDMI and USB port and were billed as portable Windows desktops. Microsoft obviously intends for Win8 to be a legitimate Android/iOS competitor (and it looks like it might just be one) all the while bringing these same inovations to conventional laptops and desktops.

The question then becomes one of scale. Your typical android distro is around 200MB, while a Windows 7 installation balloons out to like 10GB. Microsoft’s going to have to shrink that number considerably if they hope to reach Android like performance on these ARM devices.

In the Windows Vista days, there was a lot of talk about the pillars of Longhorn (Avalon, Indigo, WinFS, etc) which were all PR-speak for Microsoft’s goal of weaning us from the NT codebase. The thinking was that if they started to replace high-level services and subsystems of Windows with better stuff, down the line they’d be able to replace the kernel and low-level systems with better stuff without destroying their existing ecosystem.

Obviously this is all conjecture. We won’t know anything substantive until we get our hands on some of the Windows 8 milestones later on this year. One thing’s for sure, Microsoft’s out of their Longhorn funk and they’re trying to get the ball back. Now let’s watch as Apple eats their lunch again.