Let me just add my 2 cents
memory management issue.
I think the fact that MS made programs remain in memory when the X button was clicked was due to the performance of the FLASH memory available back then. The effort taken to load a program from storage to execution was probably too much and thus it was decided it was best to leave them running so that when user's need to get back to the program it can respond quicker (remember, the PPC has always been a multi tasking OS, unlike a PALM which runs only one app at a time so users can switch around more).
The idea was that when any program started it can request that it needs X amount of application RAM to run, the OS will then kill the previous apps to free the memory which the program asked for. But I don't know why a lot of programs don't implement such a function call on startup, it's a simple method call SHCloseApps(n) where n is the amount of memory to ask the OS to free. It's easy and works for all the programs that I've made for my clients.
Of course with 6.1 this problem seems to be moot now since the user can now choose what the X button does.
Gesture Input
While gesture input is nice and cool, it should be used as an alternative input instead of the primary input unless it can be very accurately detected. For example, a simple swipe gesture can easily be misinterpreted as a tap if your finger just happens to slip while swipping. And it's not something you want to happen when all you wanted to do was to scroll the page but ended up hitting a link on a web page. I think this happening to me alot on my Touch Diamond.
One thing that I want to see fixed in WM7 is
THE DARN PPC ALARM APPLET!!!
I can't believe it's still having the same little caveats after all this time.
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Doesn't support WMA,MP3 or MID files (Smart phone one does)
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Doesn't repeat sounds properly (Smart phone one does)
I've used both PPCs and SPs so it really iritates me that even until now the Alarm app still has these problems. I do not feel like buying a program just to use it as an alarm! :P