I wouldn't say the response was 'muted'. Pretty much every blog I read was very excited about the Lumia 800. Personally it's the first Nokia phone in a LONG time that I'd actually get.. and one of the best designed phones I've ever seen really. So much nicer than the indistinguishable monolithic black slabs that the HTC/LG/Samsungs seem to churn out these days.
And I think Windows Phone 7 is serious competition for Android and IOS if it just has the right hardware to match the design. Overall it's 10x more attractive and natural interface than either of those OS's. Android in particular is abominably ugly, and IOS hasn't changed the UI significantly since the first iPhone. I strongly feel that the general public will respond to WP7 if it's presented in the right way, which is exactly what the Lumia 800 does.
I'm keen to get this phone. I have a Blackberry 8520 and an iPad. So given the choice between, BB, Android, iOS or a Windows 7 phone, I think I'm actually going to go for the Microsoft one.
It looks better than the other phones, the messaging far out-wins the others and I think the lack of apps isn't going to convince me that Apple is the way. I want a phone that does what it has to and I'll leave the games to my console/PC.