OK whatever. If you are going to nitpick on what constitutes an "internet tablet", there probably won't be any other device on the market that will fit (perhaps ever) into your narrow defintition of the category.
I agree that the mylo is not a "tablet" device, and as you point out there are many deficiencies. I'm not even saying it measures up to the 770 in any way, or is in direct competition or shares the same demographic. But in the eyes of the masses and idiotic tech reviewers such niche classifications make little difference.
I guess I'm a little more flexible with my definition of what a internet tablet may be, or whatever one wants to call an internet devoted palm sized device. Perhaps because I don't see touch-screen as a necessity. For one thing the stylus paradigm is outdated and probably will eventually be replaced by some other input method at least in some devices. Personally I would not necessarily reject a mouse-pointer via joy pad type control, among other possible UI+hardware combinations. The stylus thing's a vestige of the Newton Message Pad thats been badly implemented through Palm and later by Pocket PCs and Tablet PCs.
In anyway my point was not that Nokia should be influenced in its development of the 770 (as you put it) by the mylo. My point was that hopefully with more gadgets in the general field of portable internet surfing devices, corporate execs would not feel the need to pull the plug on projects like the 770, and that hopefully they'd feel the impetus to put more resources into further development.