Oracle's lawsuit against Google is airtight. Android's use of a non-compliant virtual machine (the Dalvik VM) is a clear violation of the Java license agreement. And there's legal precedent: Microsoft paid Sun $20 million back in 2001 when Sun successfully sued them for trying to "embrace, extend, and extinguish" Java.
Google will lose the lawsuit. And nobody has ever accused Larry Ellison of being Mr. Nice Guy. He doesn't want money this time. He wants to protect the intellectual property Oracle acquired from Sun. He wants all copies of Android to be "impounded and destroyed" (a direct quote from text of the suit.) Because if Google is allowed to plagiarize and distort Java, others will follow. Ellison is making an example of Google, and it's going to be a law school textbook IP case study for the ages.
Soon Android will be off the market while Google is forced to retool their JVM to be 100% Java compliant. Google is already scrambling to get rid of their non-compliant Dalvik VM. They actually hired James Gosling, the "inventor" of Java, so they've got religion now.
And, although money isn't the motivating factor behind the Oracle lawsuit, it is a factor nonetheless. Google will end up paying Oracle a license fee for each and every generic me-too Android iPhone clone and iPad clone that their hardware partners can mash up. And that erases Android's only advantage over WP7. Android will no longer be free.
So, when Android is off the market, Nokia's WP7 phones will have a chance to avoid becoming KIN 2.0. There will be a window of opportunity for Nokia and Microsoft to build up a little market share. Some corporations and consumers will buy Nokia WP7 phones just because Nokia and Microsoft are "too big to die." (And just when Google thinks it's safe, when they've implemented a 100% compliant JVM, Apple can sue them for GUI patent infringement. But that's another story...)
In the meantime, both WP7 and Nokia will have zero market presence. For all of 2011 and part of 2012. That's an eternity.