This might lower the sales of Larrabee a bit as many people will still be using Windows XP by the time Intel's GPU arrives, but it's a logical move as Windows XP doesn't support the latest gaming technologies, such as DirectX 10 (and 11).
Intel simply wants to move away from this operating system and invest its development time in the future, which is obviously Windows 7. The Vista driver is reality, as this operating system is gaining market share as we speak as most of the systems do come with Vista and you almost don’t have a choice to go back to Windows XP especially when you buy your PC in local retail store.A Linux version should also be available, as Intel will reportedly first go after the lucrative workstation market.
Desktop / gaming Larrabee will probably come much later after workstation simply as workstation driver is complex and hard but at the same time you only need to optimise OpenGL as this is what most of the workstation software use, while in gaming DirectX plays a much more important role.