I don't think that using WM7 on Nokia phones is the best choice to Nokia.
If they had something like an Android AND a WM7 phone than it would be interesting. They cant be idiots by just sticking with MSFT on this. If a company isn't doing great they should stick with all sides instead of choosing the only one that isn't exactly on the market yet. Ok, they have a phone, but they don't have a 'huge' market anyway. Only MS fans have those phones yet.
I think that while Nokia have to think about a new WM7 phone they should take the N8 and put Android in it. Of course it doesn't have a killer hardware, but it has a great camera and it would be nice to see that happening.