Yes, you're reading it correct. Microsoft intends to deliver a 128bit kernel in the next Windows versions. A bit ambitious if you ask me. The 'current' 32bit operating systems run fine, because the drivers for those operating systems are widely available.
Have you ever tried to get your hands on 64bit drivers for hardware not older than two years? I tried, but failed eventually, since there's still one unknown device in my Vista x64 install.
I'm sure that Microsoft will use some layered model with the 128bit OS. That way you can use 128, 64, 32, and maybe even 16 and 8 bit drivers and applications. This way everythin will run, but don't expect stability.
What's wrong with going full 64bit first? No 32bit (hardware) drivers, the only 32bit that's allowed are 32bit applictions (which run in a special 32bit mode). From there forward you you start with 128bit OS (with 128bit drivers only) and minimum 64 bit applications. You need 32bit? -> VMWare (or MS own HyperVisor thinghy).
I still run into incompatibility issues with my <2 year old Fujitsu laptop running Vista Business x64. They should fix that first, and move on after that.