I saw a question on Linux Kernel. While reading that I had this doubt. LInk to that post : http://stackoverflow.com/questions/1806585/why-linux-is-called-monolithic-kernel
According to Wikipedia it's a Hybrid kernel. Which may or may not be just marketing speak for about the same as a monolithic one. The graphic on the latter page does make some things clearer, though.
Most importantly, almost no program on Windows uses the kernel API directly. And the complete Windows API subsystem resides in user space which is a rather large part of the OS as we see it. And in more recent versions Microsoft began to pull more and more device drivers from kernel space into user space (which is especially a good idea with certain drivers, such as for video cards which are probably as complex as an operating system on their own).
The Windows NT branch of windows has a Hybrid Kernel. It's neither a monolithic kernel where all services run in kernel mode or a Micro kernel where everything runs in user space. This provides a balance between the protection gained from a microkernel and the performance that can be seen in a monolithis kernel (as there are fewer user/kernel mode context switches).
As an example, device drivers and the Hardware Abstraction layer run in kernel node but the Workstation service runs in user mode. The wikipedia article on Hybrid Kernels has a good overview.
The Windows Internals book gives an explanation for the hybrid approach
... The Carnegie Mellon University Mach operating system, a contemporary example of a microkernel architecture, implements a minimal kernel that comprises thread scheduling, message passing, virtual memory, and device drivers. Everything else, including various APIs, file systems, and networking, runs in user mode. However, commercial implementations of the Mach microkernel operating system typically run at least all file system, networking, and memory management code in kernel mode. The reason is simple: the pure microkernel design is commercially impractical because it’s too inefficient.