Objectspaces will be merged into WinFS.
Read more about it here: http://msdn.microsoft.com/data/. In short this means, if I read it correctly, that Objectspaces will not be an add-on to ADO.NET but will be available as a technology in Longhorn's WinFS filesystem.
For O/R mapper vendors and developers, this is of course good news. For the people who were waiting for Objectspaces, it's a disappointment. How I see things, I also think it will be a disappoint for the developers working on Objectspaces for the past two years or so: most of their work is not going to hit the streets in its current form.
What puzzles me is: if Objectspaces is merged into WinFS, is Microsoft Business Framework a layer on top of WinFS or does it /will it use a different foundation than Objectspaces or will it use the Objectspaces code as well as an integrated own layer (thus not as a separated layer) ? Time will tell I think.