While Roz was talking I kept thinking Zune Phone, then I visited techmeme and saw this
http://www.cnbc.com/id/27912313 Did someone say Pink? so that answers the last question (Well, either that or this video is "the source")
I'm hearing from a good source that Microsoft is ready to give a major facelift to the company's Zune music player that could mean its evolution into a new smart phone from the company.
My source says that the new device falls under the codename
"Pink" and that it will combine the company's Zune and technology from
Microsoft's purchase of Danger Inc., the company that brought us the Sidekick flip phone available on T-Mobile.