It doesn't look at all different from Vista and some people like to call it Vista SP2. I hear its a lot faster though, which is a first for a Windows product in spite of their claims up until XP. I hear it boots up almost instantaneously.
From what I've read this really due it being stripped down, such as the removal of a number of embedded applications such as Media Player. I have not actually confirmed this for myself however and I can't see how the lack of applications such as WMP could do such a thing considering the -N versions of Vista don't ship with it either. However, I suspect there's a lot of behind the scenes apps removed and code has been more streamlined and optimized. It sounds like what Bill testified (advertisied) about a stripped down Windows during the trial. I wouldn't be surprised if it was something similar to Pocket PC (aka Windows CE) or what they used to put in toys and refrigerators.
I also hear that the WinFS still won't be a reality.
If it is Vista SP2 this would be a good marketing move for them because the drivers will be available on most available hardware already. The OS will be launched in a "mature" state with most of its kinks worked out. In fact, the reviewers I read said W7b looks like its already to launch.
Plus, instead of releasing it for free they will make some money on it and finally migrate people off XP.