This was something Joe asked me yesterday and I done some digging and wanted to share it with everyone!
Basically it would seem that the plan is for Microsoft to have a predicable release cycle alternatiing “major” and “update” releases. From what I can gather, the update release will be every 1 to 2 years and major releases every 3 to 4 years. It would also seem that the “update” release could well be called Product R2. I have not found out much, but below should help!
Major Windows Server releases include a new kernel and therefore are capable of supporting new hardware (for example, system buses); new programming models; and improved fundamentals, such as security and reliability. Changes of this nature can sometimes impact the compatibility of the new operating system with existing hardware and software.
Update releases integrate the previous major release with the latest service pack, selected feature packs, and new functionality. Because an update release is based on the previous major release, customers can incorporate it into their environment without any additional testing beyond what would be required for a typical service pack. Any additional functionality provided by an update would be optional and thus not affect application compatibility or require customers to recertify or retest applications.
Service packs incorporate all of the current critical, non-critical, and customer-requested updates into one convenient package that has been extensively regression-tested by Microsoft and by customers during a beta test program. Service packs may also include new security enhancements, such as the Security Configuration Wizard that is included with Windows Server 2003 Service Pack 1 (SP1), now available. Occasionally it is necessary to make changes to existing system binaries to support new industry standards or customer-requested features. These changes are closely scrutinized, evaluated, and tested before being included in the next service pack. To the greatest extent possible, Microsoft strives to maintain application compatibility between service pack releases and performs extensive application compatibility tests with each service pack. Application compatibility issues are usually restricted to applications that inappropriately use private, internal interfaces or system calls.
On occasion, Microsoft will release feature packs. However, to simplify the update process for system administrators and IT implementers, Microsoft plans to substantially reduce the number and frequency of standalone feature pack releases. Instead, most feature packs will be integrated into the update releases and major releases.
… Two years after the initial shipment of a new product, an R2 release is scheduled to extend features, roll up bug and security fixes, and provide a fully updated foundation for new releases. Two years after that, according to the roadmap, a full-version release of the software is due.