You still can't name a file or folder "con" (even in Win7) because it's a reserved word used for keyboard input on the command line. When Windows 9x was popular, you could bluescreen any machine on a local network by trying to access the share \\machinename\con\con, which was great if you lived in a dorm :)
You can do it with Cygwin though, and Explorer will still have trouble dealing with it after it's been created. You can also create files with a trailing period or leading/trailing space, which usually isn't allowed.
