Nokia's "First Access" service that would let N81 owners play the 2nd Generation N-Gage games has been delayed until 2008, citing issues that they discovered via their 1000 global testers. We actually tested this new N-Gage platform earlier this year, and found it kind of to be like an Xbox Live Lite for mobiles. It seems (from this patent) that Nokia is seriously thinking about beefing up the N-Gage experience, and a successful launch sans bugs goes a big way into doing so. [N-Gage Blog]
Microsoft should team up with Nokia for a Xbox-Ngage-Zune xbox live/smartphone device.
With Nokia's mobile expertise and microsoft's marketing and third party support, they could really give the other guys (well Sony anyway - the DS will still print money) a run for their money with a solid portable gaming system that integrates with XBL (and also works as a phone, email device, camera, mp3 player, and towel warmer.
There are a lot of us who can't justify carrying around a big device that only plays games. However, if we could have a nice Nokia Smartphone that also integrates with our 360 and with XBL, that would be a no brainer.
Not that Microsoft or Nokia are smart enough to realize they are each one half of a full gaming company.