In an interview with Mobilized today, Acer CEO Gianfranco Lanci mentioned that they are working to create a Windows Phone 7 powered handset.
Gianfranco also talked about why they originally turned to Android (over Windows Mobile 6.5), and why Windows Phone 7 has them interested again:
We saw a lot of limitations on Windows Phone a couple of years ago and we moved to Android because of user experience, and even the possibility to be a little more creative from a content offering and so forth is better than on the Windows phone. If we look at Windows Phone 7, today, I think we see the same opportunity you can see on Android in terms of customization.
There are no details beyond the mention that it exists, so why not use this time to reminisce about Police Quest III?