Microsoft released Windows Server 2008 R2 only in 64bit versions (both x64 and IA64), but for 32bit, Microsoft provides Windows on Windows (WoW) support, that offers backward compatibility between a processor architecture and one downlevel processor architecture. There’s a 32bit version of WoW, and it allows compatibility with 16bit apps. x64 versions of Windows since Windows XP and IA64 versions of Windows since Windows Server 2003 also have WoW onboard. This version allows to run 32-bit app in 64-bit environments. WoW in 32-bit OS can run some 16-bit app and WoW in 64-bit OS can run 32-bit app. The drawback is you cannot run any 16-bit apps on Microsoft's 64-bit OS. When planning for R2, Server Core team had to decide between: configuring Windows on Windows (WoW) as a Server Feature, installed by default; configuring Windows on Windows (WoW) an optional Server Feature, allowing administrators to install it when they need 32bit support. Hence, they decided to make WoW an optional feature and shipped as such as part of Windows Server 2008 R2 Beta.
More info: Direteam blog