Jeff isn't a journalist or simple tech blogger. He is a Microsoft Evangelist. He is, in fact, their go to guy on Windows Phone. He is paid by the company to talk up their products, and as such gets the inside knowledge of the device. Yes it's biased, but that doesn't mean he's getting his info from fact sheets or something.

The 12GB is not simply the OS install. It also includes things like Office RT and other useful apps which may or may not be removable. The storage is also expandable, so for a little bit extra you can have significantly more space than a comparable iPad.

Except that Office for RT has been customized for the touch interface. They aren't expecting you to navigate a Office 2007/2010 style Ribbon with touch.

One word for you: enterprise. Don't forget where Microsoft's bread and butter is. Oh, and by the way, Windows Phone 7 has Angry Birds so I can guarantee you that Windows 8 will too.