They will not cut out all of the win32 APIs in the next version of windows (Longhorn) however they are going to be cutting a lot out:
http://www.iapplianceweb.com/story/OEG20030507S0037
WINHEC: Microsoft plans Win32 API, XAML revamp
By Paula Rooney, CRN
(05/07/03, 04:27:34 PM EDT)
New Orleans, La. -- Microsoft plans a major cleanup of Win32 API and integration of XML application markup language (XAML) to make the next version of Windows as friendly to developers as users.
Details on this revamp were revealed at the Windows Hardware Engineering Conference here.
First, the software giant aims to slash the number of API calls in the Win32 API set from more than 70,000 to fewer than 10,000 to help developers better exploit the next-generation Windows shell, user interface (code-named Aero) and .Net framework components in Longhorn, according to sources familiar with the Longhorn plans.
"Win32 has like 76,000 APIs, and they're taking it down to 8,000 with Longhorn technology," said one source familiar with the plans.
And some movies that I was watching on Microsoft MSDN say mostly the same thing. This is what I was referring to. You are right when you that it will not happen all at once however well over the majority of the Win32 API calls (it seems) are going to be cut out.
Also here is a great movie by Microsoft's new WinFX plans with Longhorn:
http://msdn.microsoft.com/msdntv/episode.aspx?xml=episodes/en/20031107WINFXBA/manifest.xml
GrayKnight