Microsoft released PowerShell in 2006 for use on Windows XP and Server 2003. It was upgraded to version 2 as of Windows 7 and Server 2008 R2. PowerShell v2 was also released for use with XP and 2003, though it isn't 100% feature comparable to the version running on Win Vista/7 and Server 2008/2008r2.
PowerShell provides a vastly improved scripting environment for Windows versus previous .bat and .vbs methods. Version 2 on Win Vista and higher and Server 2008 and higher also allows remote execution of scripts, a feature lacking in all previous native scripting environments.
Microsoft has taken great pains to provide PowerShell hooks to all of their recent products. Many GUIs now execute PowerShell commands in the background, and some even provide feedback regarding the command they are about to execute which is a great aid to script writers.