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A Mixed Review For Windows 7's XP Mode
The Register writes "If one thing excited people more than the disclosure of the Windows 7 Release Candidate's availability, it was the news of Windows 7 XP Mode. The Reg's Tim Anderson gave Windows XP Mode a mixed report in his review of the Windows 7/Virtual PC combo. Overall, the level of integration is excellent and Windows XP Mode showed strong potential. However, responsiveness of applications was sluggish and the seamless integration between Windows 7 and XP proved confusing."
firstly, you'll have problems if they did that as a lot (ie nearly all) of the .NET framework is a managed wrapper over the underlying, native, Win32 or COM code that already exists. You didn't think .NET was completely new and 100% 'pure' managed did you? How naive.
Most of MS security issues are architectural, ie design issues, that will not be solved by a rewrite in .NET, you'd still have stuff like conficker or smiley central replacing icons and allowing the user to unwittingly run the virus app.
As for 'anything that needs to be added could be added quickly', lol. When would that be? service pack 1? how about a Windows update patch - you'd never be able to release anything unless all your target computers were fully patched to the absolute latest version, but even then you occasionally find updates that are not installed because they break existing things (eg many corporates still run IE6 because of broken apps on IE7).
No, if you want a brand new, completely fresh OS to work with that doesn't suffer from nearly as much "legacy crap", then you want a Mac or Linux. Sorry, but you'd get better results that way, MS releasing a .NET onyl version of Windows would be so broken (and require so much RAM and CPU) that it'd destroy their established market base.