It's true that MS is not great at naming. Windows Live Mail is newer than Window Mail but runs in conjunction with Microsoft Hotmail, previously known as Windows Live Hotmail and MSN Hotmail. Oh, and not to be confused with Microsoft Outlook or Outlook Express.
Windows Live Hotmail Outlook Mail Infinity Express (WLHOMIE)
MS will continue to support all prior versions in addition to this one. Five years will pass and 7% of MS users will have switch to WLHOMIE. Then WLHOMIE itself will be superceded.
That it was the start of a new mobile platform. It made a little sense at the time. I think the logic was that Windows Mobile 6 to Windows Phone 7 just sounds like a rebranding with a version number increase, whereas "Windows Phone 7 Series" sounds like a reboot, a new lineup.
It's also entirely possible they planned separate editions, not unlike the basic/pro/touch editions of Windows Mobile 6. So when they announced it as Windows Phone 7 Series they has two or three versions in the pipeline but come release the had cancelled all but one so it lost the "Series" moniker.
I'm not sure but I would be surprised if there was no at least slightly logical explanation.
