Steven Sinofsky, senior vice president for the Windows and Windows Live Engineering Group, wrote in an email that Microsoft's upcoming operating system, Windows 7, will not have native Blu-Ray playback support. Despite that, you will be able to burn Blu-Ray discs as an integrated feature though.
This means that you still will be required to buy dedicated software like Power DVD, for example, to watch Blu-Ray movies in Windows 7. On the other hand, OEMs and Blu-Ray drive makers will be able to extend the Windows Media Center, in order to support Blu-Ray playback by means of a codec.
"Blu-Ray support will be provided by PC makers or BRD drive makers. We have new extensibility in media center for those that provide BRD playback to support integrated playback. We do have support for burning BRD data discs," Sinofsky wrote.