Whatever the reason, "Metro" is out, and Microsoft is temporarily referring to the colorful, tiled interface of the impending flagship operating system as "Windows 8 Style UI". That lacks flare, though, and isn't exactly a name that captures the imagination. Microsoft needs something catchy to brand the unique interface and differentiate it from the desktop mode.
I'm a little surprised that Microsoft is getting blindsided by the "Metro" naming conflict so close to the official launch of Windows 8. Microsoft is generally obsessive about avoiding name conflicts. There is a reason that all of its fictitious companies and networks are named "Contoso"--Microsoft has done its homework to find names it can safely use without running into these sort of legal quagmires.
A Wired Gadget Lab article by Alexandra Chang suggests that Microsoft drop the separate name altogether. She feels that it's enough to just call it Windows 8, and that the "Metro" name just adds confusion. She points out, "How often do you hear people talking about their 'Aero desktop experience'?"
I agree completely that nobody really cares, or refers to the fact that they're using "Aero". They just call it Windows 7. The difference, though, is that Aero is Windows 7, and in the Windows 7 operating system it's the only game in town. Well, you can disable Aero, but that doesn't fundamentally change how Windows 7 works. That's the difference between Metro and Aero.
Your Windows 7 software will run in Windows 8, but it won't run in the Metro--I mean Windows 8 Style UI. Traditional desktop Windows software falls back to a Windows 7-esque Desktop mode. The Windows 8 Style UI is more mobile-oriented, and runs apps as opposed to applications (the difference being semantic in my opinion, but you get the idea).
The beta of Office 2013 runs in the desktop mode and has the general look and feel users are accustomed to from Office 2010. However, Microsoft has also developed an app version of OneNote that works in the Windows 8 Style UI. OneNote MX has a different look and feel, and takes advantage of the mobile, touchscreen elements of Windows 8 better than the desktop version.
That's just one example of how they aren't the same thing. Some software will run in the Metro--or Windows 8 Style UI--while other software will only run in desktop mode. The Windows 8 RT tablets will only be capable of running the Windows 8 Style UI apps, so it's a crucial distinction moving forward.
I suppose we could just refer to the default, no-longer-referred-to-as-"Metro" interface as Windows 8, and the traditional desktop mode as Windows 7 since that is sort of how it feels. Somehow I don't think that branding is what Microsoft has in mind, though.
I never really liked the name Metro anyway. It was growing on me, and I didn't have any better ideas off the top of my head--but when the Metro name was first revealed I was decidedly underwhelmed.
How about "Windows 8 RT-mode"?