According to Steven Sinfosky, senior vice president for Windows and Windows Live Engineering and his blog, there might not be a Windows 7 Beta 2 after all. They are considering that the next revision of Windows 7 goes to the release candidate phase.
Windows 7 beta 1 does look and feel much better than any beta OS that we tried in the last several years, in fact it is quite surprising how good it works, and since Windows 7 is really a Windows Vista service pack 3, or should we say Vista done right, this doesn’t comes as a big surprise.
We have to give Microsoft credit for lowering the hardware requirements in a time when 2 GB or memory costs less than 16 euro, but this is at the same time good news for everyone who wants to skip Vista and upgrade from XP to Windows 7.
This very much means that after Beta one comes Release Candidate 1, and if they feel happy about it, RC1 might be followed with final version but you never know this.
You can check Stevens' comments here.