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The orb you see was an animated WMP gadget that gave the appearance of existing in a 3-dimensional desktop space. (In a later screen shot, you will see a much more drastic extent to which Microsoft was thinking in terms of 3D space on the desktop.) Also, attendees were given a glimpse of more functionality that one could utilize the sidebar for. Once again, the "wow" effect was achieved.
Welcome to Phodeo. Firstly, you will notice the lack of translucency in the shell. The thought here was to keep your attention focused on what you wanted to see inside of a maximized window. If you viewed this window in a non-maximized state, Aero's translucency would kick in.
That said, Phodeo was to be a completely new experience for browsing, sorting, and working with photos in Windows. The background was an animated aurora and you could change the views of images. As shown above, images were sorted by month, and as you moved through months, the animation was kind of like a carousel, except with the smallest ends moving off into infinity and/or moving into view, depending on which way you scrolled.
Make no mistake, it was visually stunning.
For document management, Microsoft was going with something called "stacks." It was a nifty way for displaying, organizing, and sifting through documents. Also showcased in this image is a different look and feel for the glass borders of Aero -- something that quite frequently changed, albeit subtly, in multiple early builds of Longhorn.