There's an interesting article at InformationWeek about the new Windows architecture that Microsoft is developing. Windows 7, which is slated to be the successor to Vista, will use a new "MinWin" architecture. Essentially, the Windows core will be stripped down to the bare essentials, and additional functionality will be supplied through modules. According to the article, Eric Traut, a Microsoft distinguished engineer, demoed a version of the Windows core running with only a 25 MB footprint (as opposed to the 4 GB footprint of Vista).
I think this is a step in the right direction. Hard drive size increases have made sloppy programming, resulting in software bloat, much more prevalent. It's time to step back, trim the fat, and work towards leaner software.