What is it and why is it relevant?  Well, the CardMod API is a new interface for exposing common smart card functionality.  It's by far the easiest way for an ISV/IHV to integrate support for their smart cards into Windows, particularly when targeting PKI scenarios.  It'll also be a sweet way for application writers to interface uniformly with different vendors' cards.

The header (i.e. cardmod.h) is available in the latest Vista CTP SDK download.  As of this post, the latest is February and can be found here.

Documentation for the new API is available online here (see "Smart Card Module Functions").

The premier client for the new API is the Base Smart Card Cryptographic Service Provider (CSP), which is also now available for download and deployment, from Windows Update (select Custom -> Software, Optional).  For the record, the CSP has been heavily tested - it's been rolled out since 2002 at Microsoft and is required for remote access to the corporate network. 

In summary, what used to be an extremely painful job - writing a monolithic smart card CSP to add support for your card in Windows - can now be accomplished by implementing this much simpler ("mini-driver-like") interface.  Anecdotally, we've seen CSPs take multiple man-years to develop, while we've heard of experienced smart card vendors completing a card module in one month!  And it worked the first time we tried it (ah, that was a good day)!!