I used to own an iPhone (3GS) when I was dev'ing for it, and now I own a WP7. I gotta say, it's everything but "a bit of a failure". I love this OS and its interface, but mainly, I love how it doesn't just feel like a container for apps (iPhone). Everything just "flows", so to speak, and I don't feel like I always need to go back to a "main page" to go to my next app. Also, the main page for WP7 is not just apps, it's really ANYTHING you want to pin (eg. websites, playlists, artists, videos, apps, documents, contacts, etc.).

Mango is about to make that "flow" even more prominent :)