Windows Mobile is like driving stick, and iPhone is like driving automatic.
Just like the cars, most people prefer automatic. Windows Mobile will have to do a lot to win back the lost crowd.
I am surprised that WinMo cannot provide a better experience for things that we take for granted in 2008. Two things that come to mind are browsing and connecting to the WiFi network (especially the kind that you have at work with certificates). And what is with that smallish X or OK button in the top right corner, not at all finger friendly (how can they make menus bigger and not take care of that..duh).
WinMo 6.5 (once it comes out) has the potential to show that MSFT has some staying power. But WinMo 7 better come out fast and pack a punch.