If Apple had done the design of the phone and simply packaged Moto's electronics, it would be a hit. As it is, it doesn't look cool enough to warrant being associated with anything with the name "iPod" on it. It looks like just another generic crappy phone. There are a ton of phones out there with MP3 players, and that allow more than 100 songs as well.
I have no idea what their marketing guys were thinking. The W800, while just a repackaged K750i, is far and away a better phone in every respect. Even the case design, which reminds me of a 50/50 bar (orange/vanilla...) is better than the junk design Moto came up with.
I expect an iPod phone to look like something from Apple, not the other way around.