From the target="blank">Microsoft Security Research and Defense blog:
AutoPlay will no longer support the AutoRun functionality for non-optical removable media. In other words, AutoPlay will still work for CD/DVDs but it will no longer work for USB drives. For example, if an infected USB drive is inserted on a machine then the AutoRun task will not be displayed. This will block the increasing social engineer threat highlighted in the SIR. The dialogs below highlight the difference that users will see after this change. Before the change, the malware is leveraging AutoRun to confuse the user. After the change, AutoRun will no longer work, so the AutoPlay options are safe.
Basically, now when you insert a USB drive into a PC, no programs will automatically launch, eliminating the threat of malware installation. The threat has been eliminated.
Or has it? Microsoft also claimed that AutoRun will still work with smart USB drives able to pose as CD/DVD, leaving some room for danger.
The feature will be available on Vista and XP soon.
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