Mary Jo Foley has a twofer on the new Embedded Compact core of Windows Mobile: Cashmere, if released, would add FlashLite and better gesture support, while Alchemy is a new shell component that would bring "richer UI scenarios" through native access to Silverlight, meaning flicking, panning and zoomzooming.
Besides FlashLite, Cashmere would bring a better browser, integrated Live Messenger, new connection manager and other core components. It could be the heart of Windows Mobile 7 and Pink, or maybe not. It'd be a stopgap on the way to Chelan, due in late 2010, which comes with IE7 rendering (oh my), Silverlight, Flash, Vista networking stack stuff, a DLNA 1.5 compliant stack and more.
Alchemy will let developers and designers make apps that actually look good since they'll have access to eXtensible Application Markup Language and be able to use Microsoft's Expression Blend for any Embedded Compact/Windows Mobile device with Alchemy.
Intriguingly, Mary Jo's also seen a "new category" on Microsoft slide decks that'd be using Alchemy called "connected media devices" which are distinct from everything that'd drop into your brain like navigators, portable media players and other standard stuff. What are they? She's not quite sure: Anything from a magic all-in-one tablet to portable Surface to ZuneBook. Hmmmmm. [ZDNet, ZDNet]