Wow, a lot to read!
I think WM7 will be a disappointment. Microsoft has never once made a subsequent OS work better with the given resources. Every new release with significant changes also require new hardware. WM7 will be no different. Given how slow and clunky WM6 and prior are, I have doubts about MS's ability to execute against iPhone.
MS needs to change the WM programming model *and* the UI model. The only pragmatic way, without asking for 1GB phones w/ desktop processors, is to throw out compatibility and *trust* developers to port their applications.
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