Windows 1.0 is the first version of Windows released (two years after it's first demo!). The rumor is that the original 1.0 release had a very serious bug in it and was quickly replaced with this 1.01 version. I do have a copy of 1.0 somewhere so I might have to try that!

The Windows 1.01 splash.

Windows 1.x starts up to the MS-DOS Executive. It is sort of like the Program Manager/File Manager, except it doesn't use icons, and there is no drag and drop either. Programs can be executed by double-clicking, but much of anything else has to be done using the menus.

Most likely to prevent a lawsuit like what happened to Digital Research and GEM, Windows 1.01 sticks you with tiled, non-overlapping windows. The box in the upper right corner is the Resize box. Dragging it around will move the top bar of the window up or down, and subsequently move the bottom of the other program you are running in the opposite direction. Double clicking it will Zoom the program to take up the full screen. Some programs also have a resize box in the lower right.

It is possible to have all sorts of tiling arrangements. Just no overlapping windows.
While I understand why it's called "Windows", a more fitting name might be "Boxes", since you can't really overlap boxes (not real boxes anyways).