Why such a simple name, well according to Microsoft,
"The decision to use the name Windows 7 is about simplicity. Over the years, we have taken different approaches to naming Windows. We've used version numbers like Windows 3.11, or dates like Windows 98, or "aspirational" monikers like Windows XP or Windows Vista. And since we do not ship new versions of Windows every year, using a date did not make sense. Likewise, coming up with an all-new "aspirational" name does not do justice to what we are trying to achieve,"Makes sense to me, at the same time it reminds me of Nintendo DS. Because Nintendo had announced "DS" as a codename, but in the end it just worked so much better than say, "Nitro". However, I don't use Windows anymore, and in fact, I have never used Vista, so I can't personally comment on the quality of the operating system. However, for Microsoft's sake, I hope Windows 7 can fix everything that people have disliked about Vista. Only time will tell.
Full announcement at Windows Vista Team Blog