We had the official specs leaked earlier, and of note is this one line:
support Multi-Touch capability for WM7 Chassis
Previously concern have been that the internal ROM is not large enough, but this line suggests it may come in more than one partition.
ROM: 512 MB / RAM: 320 MB / HD: 207.13MB
Besides the 512 MB Flash storage (which for Windows Mobile 7 needed to be â€œfast flashâ€) there appears to be another partition with 207 MB, likely part of a further 512 MB.
Of course with a digital compass, accelerometer, capacitive screen and 1 Ghz processor the HTC Leo meets all the requirements set earlier, which suggests strongly that even if HTC never releases an official Windows Mobile 7 upgrade for the device, XDA-Developers will as usual be able to take care of that little detail.