Yeah, I remember bits and pieces about Palladium. I had to go hit Wikipedia to remember the larger parts of it, and it seems to me that they're farther down that path than some folks realize.
If you enable the optional Client Hyper-V component in Windows 8, your boot process actually starts the Hyper-V hypervisor as the kernel, and then grants a logical hardware partition (a "parent" partition) to your host operating system. All guests (VM's that you create) will then land in child partitions alongside (but not underneath) the parent.
Want to see how eerily similar Palladium and Windows 8's Client Hyper-V are?
Look at the Wikipedia "Next Generation Secure Computing Base" (aka Palladium) graphical representation on this page:
http://en.wikipedia.org/wiki/Next-Generation_Secure_Computing_Base
Now, look at the Hyper-V graphical representation on this page (scroll down a few paragraphs, it's the first inline picture):
http://en.wikipedia.org/wiki/Hyper-V
Look familiar?
There will be a time, perhaps even in Windows 10, but more likely the next release, where the Windows "host" operating system will come with the hypervisor already enabled as part of the base install. When you can abstract at a level below the host operating system, in a digitally-signed, secure-booted and TPM-key-encrypted hypervisor, you've landed in Palladium. You can already do it today, but you must enable the feature of your own accord first.