Just read an article on the NY Times site "Can Microsoft make Windows for a small world?" the article focuses on Windows 7 (desktop o/s) - its also interesting that the author mentions "The company hardly mentions Windows CE anymore", does this mean that Windows CE is dead? - far from it, there are of course a number of fairly well known devices that run the Windows CE O/S (or to give it the full, current product name, "Windows Embedded CE 6.0 R2"). Obvious devices running Windows CE are Windows Mobile [Windows Mobile 6.1 runs on the Windows CE 5.0 operating system kernel], Zune, Microsoft Roundtable (video conferencing), Ford Sync, and a large number of the worlds Portable Navigation devices!
The reality is that many devices running Windows CE are either headless (industrial control/automation), or boot and run a completely custom user experience, in which case the user doesn't know that the device is running on a Windows Embedded operating system, and in many cases isn't aware that their device even has an operating system on board.
Windows CE hasn't gone away, in fact we're working on the next release of the product right now...