Windows 7 Organic Features

Does Windows 7 have the ability to play CD's and DVD's? Can it burn CD's? What about photo editing?

Or Paint.NET, GIMP or even Paint. Windows 7 is the only OS to be able to burn CD's and DVD's with no additional software at all. You can watch DVD's with Windows Media Center or Windows Media Player.

Though I'd still recommend getting some external software :)

There are great free ones - Media Player Classic for DVDs is much lighter and gives you more options than Windows Media Player, there's also a 64-bit version now if you get x64.
And stuff like InfraRecorder for burning, or heck, even use ImgBurn. For *video DVDs* you'll need authoring software - I haven't tried out the one that comes with Windows so I can't tell you how good it is.

As people have said, Windows 7 will play CDs and DVDs fine (DVD's as long as you have Home Premium? or above. correct me if I am wrong).
If you want to make a data CD or DVD, just drag and drop the files onto the DVD drive and click 'burn'.
If you want to burn an image to a disk, just double click on the image and windows will ask if where you want to burn it to.
If you are wanting to author a DVD (make a movie for a DVD player), you will have to install another program. Luckily, microsoft has the free 'Windows Live Essentials' pack, which includes movie maker - this will author DVDs, as well as editing video (albeit basically). If you need more advanced features, you will have to look around for a solution that suits you.
Photo editing - also in the Windows Live Essentials pack. One of the programs is called 'Photo Gallery' and has the most common editing options in it. If you need more advanced features, try GIMP or Paint.net.

I am interested in why you call these 'organic features'.