To do this, Microsoft is reportedly expanding on an existing technology, code-named "MinWin." As the original article (in French) discusses, MinWin was introduced with Windows Vista and will be further enhanced into a true bare-metal hypervisor with a very small footprint and no reliance on a parent partition. Actually, it seems MinWin will be smaller than an install of Windows Core.
This approach removes the concerns of an attack surface that I and others have raised, reduces the resource needs around installing Hyper-V, and modularizes it so that only the needed components are loaded. One of the main things Microsoft is working on that will arrive with Windows 8 is the separation of Internet Explorer from the operating system. This means that you will be able to add IE as a component if you need to, but it will not be so tightly integrated with the shell of the operating system. Another feature that Microsoft is working on disintegrating, specifically for MinWin, is the shell itself. MinWin will be an extremely small install base with practically no traditional Windows shell. As you know, the Windows shell is a resource hog; by introducing this thin hypervisor without a shell, you remove unnecessary resource consumption as well.
The French article goes on to talk about another cool feature of Windows 8: the tight integration of App-V with it, to the point where you can run Windows XP, Windows 7 and Linux apps all natively on the operating system, further compartmentalizing Windows and encouraging the use of virtualized applications. (Source