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I'm not sure they need to do completely new OS.
Most of the problems and gripes people and especially we have with WM are not related to the "core" OS - Windows CE but to Windows Mobile UI that sits on top of everything and the applications using the OS.
So in my opinion, what they should do is completely rewrite the WM "part" of the OS with proper UI and better integration between parts/applications and also better integration with other devices.
Where I see a problem is that Microsoft needs 2 years after the relaease of iPhone to do WM7 that was supposedly in development and demoed sometime before iPhone and is more or less a copy of iPhone's UI - with such "speed" and so much "innovation" it won't help if they do completely new OS, just a new UI or nothing at all...
btw. I'm not sure, but I don't think XBox or Zune have completely new OS - I would guess they have specific UIs built on top of some Win API, since they don't use Intel I would guess that the core OS is at least based if not entirely WindowsCE.
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