@adolescent
Which is why I said Microsoft must be getting stingy with their SKUs. The compiler itself still supports the various architectures. Microsoft must have decided not to sell Windows Mobile 6.x for anything than ARM (and probably x86 for testing).
As far as eye candy, of course the iPhone can flip, rotate, and texture map screens. It also multitasks (it's running the same kernel as Mac OS X, after all). The difference is that task switching is controlled by the Home button and Home screen. The OP asked whether or not the iPhone could do it, not whether or not the operating environment mimicked that behavior out of the box.
The thing I don't like about the iPhone, iPod Touch, Windows CE/Embedded/Mobile, and so on is that when you close an application, it doesn't end the process. Instead, the process continues running in the background. You can kill processes on all the environments I've mentioned, but it's usually difficult and annoying to do so (holding the Home button on the iPhone, control panel on Windows). The same annoyance exists in Mac OS X (and NeXT, I suppose, which is where Mac OS X got it), but at least you have an option to end the process directly.
It's also prevalent in Windows apps that minimize to the system tray (which was never intended for that purpose) and UNIX apps that run as a combination daemon and user interface. In other words, it takes control of the process out of the hands of the user. Bad mojo. Time to revolt against the MCP, perhaps.
@JJ
I don't know if you can use iTunes (or another media player) as background music while you play a game. I'm not sure you would want to, though. Personally, I prefer to play games the way the designers intended them to be played--in the same I prefer matted widescreen to pan and scan. ;-) The iPhone, like most mobile devices, is not supposed to be all things to everybody, although it's more of a general purpose computer than most phones. The same can be said of Windows Mobile devices, I'm sure.
That sort of task switching is also a serious resource drain, unless the idle tasks are properly suspended. Most small devices are designed with a specific power budget/footprint in mind.
EDIT: Just thinking that I would like to create a custom radio station in Fallout 3 that streams from the XM 40's station. The GNR station in the game gets repetitive. I also had the BGM so low that I didn't realize the game even had BGM until after I'd finished it the first time through.