There has been much speculation about the basis of Windows Mobile 7, with some saying it will be Windows CE 6.0, an embedded OS that has been released around 2 years ago, and others claiming it will be the very latest and still shadowy Windows CE 7, code named Chelan.
From an Windows Mobile 7 Automated Testing plan we recently uncovered, it appears Windows Mobile 7 and Windows CE 7 will be intimately linked, and should arrive on the market around the same time.
Windows CE 7 brings with it a number of very desirable features that should make Windows Mobile 7 devices pretty competitive in the market. Some highlights are multi-touch support, IE7 + class web browsing, and a user interface based on technologies like Windows Presentation Foundation and Silverlight.
Read the document yourself here.