It is very cool application virtualization technology. Check out this post for details:

http://blogs.technet.com/softgrid/archive/2007/08/02/inside-the-grid-part-1.aspx

This is the first in what will be a series of posts from the team so be sure to subscribe to their feed. There is a lot of development in this area that I heard about two weeks ago at TechReady like further improvements to the core technology, sorting out some overlapping functionality with other products, and further integrating it with System Center.