Windows Phone 7 Series was originally codenamed "Photon" and it is planned for release in late 2010. It was initially intented to be released in during 2009 but several delays prompted Microsoft to develop Windows Mobile 6.5 as an interim release.
During the Microsoft's Venture Capital Summit, Microsoft CEO Steve Ballmer delivered the keynote speech and he explained that Microsoft Windows Mobile was a screw up and that they had to release 6.5 instead of 7. After that they revamped the whole Windows Mobile team and Steve Ballmer promised that this (failure) will never happen again. Read more about Steve Ballmers keynote speech about Windows Mobile here: http://www.mobiletechworld.com/2009/09/24/steve-ballmer-wishes-windows-mobile-7-had-already-launched-but-they-screwed-up/
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