I still don't understand why the xPhone doesn't exist. This has always seemed like the obvious direction for Microsoft from a brand perspective. Use the phone as an extension of the 360 and do some really cool things with it - messaging hub, video chatting, go all in on games. It's just crazy to me this doesn't exist.
One thing I like about the Xbox Live app on WP7 is that you can message people from the app and the live tile updates if you have a message waiting. I downloaded the new companion app but I havent tried it out yet to see what other integration they have. My only want now is to be able to enter in registration codes on the phone instead of in the xbox. I miss out on too many twitter giveaways at work :P
To me thats like saying corporate customers would be turned off by the iPhone. I get where you are coming from, but I think it could be handled in a way that would make both consumers/professionals love the phone. Apple is clearly the example to follow. Microsoft has leverage with the 360 its just crazy to me they don't use it.
I'm assuming an Xbox phone would be more than just the name, so the design, UI, accessories, and marketing would all be Xbox-y and targeted to gamers to some degree.
An Xbox phone that looked like Windows Phone 7 would be no big deal for business, but an Xbox phone that looks like it is part of a gun from HALO probably would be a problem.