So does that mean that people will not be able to install software from CD/DVD that was written for Windows XP/Vista/7 or .... That would be a major issue if that were the case. I develop custom software directly for a specific end user, selling through the app store for this type of thing is not an option and I sure would not want to share any revenue for this type of app with MS or any other 3rd party.

For apps that are written for the masses and distributed via the MS store there is no problem from my POV so long as we still have other avenues.