A Microsoft Australia Evangelist, Michael Kordahi is talking up the upcoming Microsoft Phones. Yes, "phones", as in a little community of humping rabbits.

While chatting away on the
Frankly Speaking podcast, Windows Evangelists Michael Kordahi and Andrew Coates might have let slip a few details about the upcoming Windows 7 phones. Rather than go the strict route of one flavour for all, there will be a range of basic designs to cater for a wider level of budget and need.
Unfortunately
the podcast has been pulled, which gives a good indication of the validity of the story. So we've had to turn to ZDNETter
Mary-Jo Foley for the gist of the chatter. She reports that:
"Chassis 1 is for PC makers developing “big touch screen” phones, the hosts said. These will be touch-only devices, with 1 GHz processor (hello, Snapdragon!) and a dedicated graphics processor, the Frankly Speaking guys said. These are the phones that will be out first at launch this holiday season.
Chassis 2-compliant phones will support real sliding keyboards plus touch, the podcasters claimed. They said these would be more Palm-Treo-like. There also will be Chassis 3 phones, about which the pair didn’t have any details. One of the hosts (I couldn’t tell which) said he expected Chassis 3 phones might be candy bar phones. The pair didn’t say when Chassis 2 and 3 phones might ship."
Of course, Microsoft will be
firmly in charge of the OS and software (including GUI -- all changes are prohibited), and its in this area that any phone will be judged a success or failure. The range of hardware will give the phone wider appeal across a broader range of buyers but if the software has to be tweaked to the different types of phone, will that cause devs a problem and will compatibility issues arise?