This is a design 101 failure on microsofts part. When you have different products, market them under different brands. What we are going to get is a single dvd (or more preferably a digital download) with all of the backend for either a desktop OS or a tablet OS on it and all the extra space consumption that comes with putting both of those on a single device.
They should have made Windows Touch and Windows Classic, not try to mash them together into an amalgam of confusion like what happened with all the versions of Vista.
The strangest thing is that trying to go so touch heavy seems to be the thing MS would not want to have happen - they have have a HUGE keyboard and mouse business and they don't manufacture lcd screens (and thus, they don't make touch screens) so they are effectively trying to kill one arm of their own company? (this is what happens when you have a huge tech giant monopoly that makes conflicting products).
The fact they had windows mobile, even if the OS sucked, was the right direction to go. They needed windows phone, windows touch, windows home user, windows business user, and windows server. 5 different operating systems for 5 very different purposes. Windows 8s prospects are looking bleak - I better be able to just install a version of windows 8 that is basically Windows 7.5, same UI, with optimizations, some of those new features for file transfers and such, support for directx 12 (if they plan on bringing that out with windows 8 and not making it backwards compatible) and none of the metro crap that is about as useful on a desktop as the OS Lion app store on a desktop.
Even better, this is just an example of corporate desire vs consumer desire - they want to make a one size fits all product so they don't have to have 5 dev teams and all the headache that comes from making different products compatible when they could just sell one middle of the way one that does everything. Too bad that is going to crash and burn next year as bad as Windows Phone has been failing.