Well, it's looking very likely that we will be turning on the newly refactored connectivity stack tomorrow. The connectivity stack I'm referring to is the one which allows “Whidbey” to connect and manipulate Windows CE devices and emulator images. The last few weeks have been pretty grueling for the team, but I believe we now have a connectivity stack that we will be able to efficiently stabilize (vs. being in a state were fixing a bug was very likely to create at least one new bug due to the fragility of the code base). In the process we also discovered a few feature holes, which have either been filled in or will be shortly.
Assuming the new connectivity stack is turned on tomorrow (i.e. testing doesn't uncover any major breaks in end-2-end scenarios tomorrow), then anyone trying out our PD5 drop (community drop 2?) will be using this new connectivity stack and will hopefully notice a marked difference between “Whidbey” and Embedded Visual C++ 4.0 and/or Visual Studio 7.1.
The native debugger team has also done a ton of perf work to ensure that the native debugging experience on devices is much more performant than in Embedded Visual C++ 4.0 (i.e. it doesn't take 10 seconds to step over each line).
Also, our integration into the VC project system and the Visual Studio shell is also starting to look really good.