The latest is that Pink (as it’s code-named) has an ad agency, will be based on Windows Mobile 7 but have it’s own proprietary UI layer, should be available next year-ish, and provide Zune, My Phone, and Windows Marketplace for Mobiles functionality.

So have Microsoft’s previous denials been based on crossed fingers and the “truthiness” of actually making a Zune HD Phone? Or as TiPb has been predicting, an Xbox Phone?

Let’s face it, Microsoft would be negligent and borderline daft not to integrate the technologies and leverage the brand of Xbox.

Oh, wait…