Yes Microsoft has further complicated their mobile OS offerings. We recently reported that they are paying developers to create Apps (read the article) and that Windows Mobile 7 won't have multitasking capability (read the article) You may recall that in all the Windows Mobile 7 hoopla they announced that it would not be backwards compatible. So now Microsoft seems to have backtracked a bit and is going to be providing backwards compatibility through another smartphone OS. It remains unclear why backward compatibility was not put just put straight into Windows Mobile 7, but at the end of the day it is doubtful this will matter by the time these OS's are released another couple million iPhones and Droids will have been sold. However, the real opportunity cost here is the inability to translate the mobile OS to a tablet device.
Read the article.