Microsoft and the version #3 rule.
Punting a WP7 on Nokia hardware should be simple - munge the existing drivers for the WP7 API and you could 'knock one out' (yes, I know) in a hurry. Its an engineering problem, one Nokia are good at (sans all the engineering teams walking out, err...)
I expect WP7 to advance quite a bit and catch up, as long as the consumer unit and BU don't go to war over features. The only thing that would work against that is lack of communication between, and commitment from, MS and Nokia engineering teams. The only thing that could _really_ bollox it all up are their respective bureaucracies, but we have already tread on that ground, around and around, like Marvin the paranoid android stuck in a hole.
There is enough cash floating around for them, I think, to do it the X-Box way and chuck it around until something sticks, all gooey and cheaply, to whatever demographic is unfortunate enough to be in the way. As with any MS product, I would wait for version #3 though (I'm joking, really!) before it hits its stride and the money sucking starts in earnest.
PS: Nokia, please get an industrial designer that did not work on chunky Casio watches for orienteering bods. Thanks, much appreciated.