Not a desktop version, but you can get something close to a base CLI linux install with server 2008 core http://en.wikipedia.org/wiki/Windows_Server_2008#Server_Core
Yeah, but it's still running a GUI to display that command line screen. You still get all the problems associated with GUIs - unnecessary memory usage, and the potential stability/security issues, and having to run the appropriate drivers which cause more of the aforementioned resource/security/stability issues, but all the time without getting any of the benefits of having a GUI running away in the background - a classic Microsoft 'solution'.
I've read somewhere that MS has been working for the past few years on modularizing the components of Windows so that they can run the OS without having to run the GUI on top of it. And they're still working on it years later because not even Microsoft knows what's going on inside the belly of the beast. My understanding is that the NT kernel was originally a microkernel design, and they shoved more and more of the operating system's functionality into the kernel for performance reasons and now it's a gigantic mess because if they take stuff out of the kernel they'll just break other stuff that should be unrelated but isn't.
Yep, *nix has modularity, Windows just sucks balls.
You are somewhat correct in saying that Linux is more modular by design. This is mostly because it shares the UNIX design philosophy. Microsoft has demo'd a 25MB windows 7 CLI build running as a web server. I think if they wanted to enter the embedded market they probably could dedicate a few tens of millions of dollars and get the code refactored to compete with Linux w.r.t modularization. http://www.youtube.com/watch?v=NNsS_0wSfoU#t=3m30s
What they said time after time was that MinWin was just the basic kernel that they were going to use in Windows 7 and 2008 Server R2. It's not a viable OS by itself, they just took the kernel, hooked up a very basic environment around it and ran a dumbed down
(they say so themselves in whichever video they first announced it in) http server on top of it. I wouldn't boast about it needing 25MB of RAM, especially given that you can get a GUI Linux desktop running in about 16MB of RAM, and probably not much more for a proper web server running on top of a CLI linux installation with the appropriate user land utils.
Embedded? There are real embedded systems that run in kilobytes of RAM that do real things. Still wouldn't boast about needing 25MB to run a castrated http server on top of a DOS-like shell.