Comment Better discussion available at ComputerWorld (Score 3, Informative) 319
This original source article includes a discussion of the architecture involved - and the person they interviewed admits he hasn't seen it in action, and has no idea how it works. He suggests it could be one of three approaches - dual boot, an Android API within Windows (somewhat akin to Bluestacks), or a VM running within Windows. I would add a fourth - a hypervisor, permitting both OSes to run concurrently as VMs - though that seems unlikely, as it would require the OEMs to license Windows differently, as I understand it.
Interesting times. I agree with the commenters who say MS should be afraid of this - Google has taken its sweet time maturing Android into a desktop-supporting experience, but it's close, and "Android PCs" are already in the pipeline to take advantage of it. Any familiarization for the "unwashed masses" with what it feels like to simply run Android as your laptop/desktop OS has to be viewed by MS as, well, "crossing the streams" bad.