The rumor I've head is that the "Zune Phone" is not going to be WM device, but a combined Zune/Sidekick. This is what a columnist at CNBC is reporting:
http://www.cnbc.com//id/27912313. However, it very well could just be a that they are adding the Zune media interface to a beefed up sidekick. In any event, I think it's a good business decision, as Microsoft's OEM partners have been very slow to innovate and been a significant part of the reason many of us feel Windows Mobile has devices no longer measure up.