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"Under the hood" WP7 is Windows Mobile, in terms of the base OS that interacts with the hardware. What makes it WP7 is the entire UI replacing the old Windows Mobile UI and the new development model. Basically, WP7 is a container within Windows Mobile.

The WP7 UI definitely does not scale well. It's not a screen size issue, it's an input style issue. It's simply too dependent upon touch. In the current Windows 8 developer preview, you feel this all the time, things designed for touch but the mouse just is not the correct substitute. Luckily, they have a lot of time to sort this out and get it right.

J.Ja