Envisioned around the AI computer from the popular Halo game franchise, Microsoft says Cortana has the ability to pay attention to what you search for, your interests, and the places you visit. In this way Cortana will offer tailored search suggestions. Additionally it will get smarter the more you interact with it, or shall I say "her".
Other skills in Cortana's arsenal are looking up and keeping track of your flights, checking when your next appointments are and delving into associated details to better serve you. For instance Cortana will be able to dive into your appointment specifics to say call the restaurant where you're planning on having lunch and adjust the reservation if necessary.
For instance you can tell Cortana to create reminders centered around people. Specifically have the feature remind you to ask about your sister's puppy the next time she calls. Cortana is also supposed to be intelligent enough to understand a wide range of queries using more natural language. Users can say, "Facebook, what's up with such and such?" and Cortana will initiate a report of your friend's recent Facebook activity.
It all sound very futuristic but don't get too excited just yet. Microsoft explains that the Cortana feature is still officially in beta so I assume some bugs still need to be worked out.
Article by Brian Bennett