The 7 means version 7 not 1. Just saying...

I'd rather say Microsoft, with versions 1 through 6.5, learned how not to make a mobile OS. WP7 is a radical departure from the Windows CE kernel. WP7 is to WinMo 6.5 what NT 3.1 was to Windows 3.1.

With a better user interface (NT was as bad as 3.1)

There have not been 7 versions of Windows Phone, it's the first version. The 7 is to tie it into the current release of Windows.

http://en.wikipedia.org/wiki/Windows_Phone

And? Windows Phone is not Windows Mobile. Much like webOS is not Palm OS.