Looks like the rumor of Microsoft bringing its own branded smartphone to Mobile World Congress has been squashed. What MS reportedly has done is create a "reference chassis" from which future devices would be made, including with the Nvidia Tegra chipsets.
Says ZDNet's Mary Jo Foley:
Think of what Microsoft is doing in phones as similar to what it has done in the PC market. Microsoft often develops reference implementations and encourages PC makers that they build PCs that adhere to a set of reference guidelines/specifications.
You can loosely tie that in to what has been said about there being fewer Windows Mobile smartphones in the future, and it's starting to make a little more sense. Want better and tighter phones running your operating system? Give the manufacturers something to work from. It also makes sense to assume that this has been done in the past and that these latest MS-branded smartphone rumors simply involve the next-gen reference chassis.