It turns out that Apple's hiring of Mark Papermaster, to replace Tony Fadell as head of iGadgetry, is turning into the juiciest soap opera action within the walls of One Infinite Loop in some time. Jon Gruber has a must read on the relationship between the two moves; to sum up, Fadell, who essentially brought the embryonic iPod with him to Apple in 2001, hasn't been involved with the iPhone or iPod touch at all, and had a vision of a much more limited iPhone, essentially an iPod that made phone calls. According to an updated footnote in Gruber's post, this gadget was to run Linux.
This was a nonstarter, not least because iPhone Linux would have had to be released as open source, due to Linux's licensing. By contrast, the BSD underpinnings to the iPhone's OS X don't require any code distribution. Wired hilariously imagines the scene that unfolded with Fadell came into Steve Jobs's office and uttered the L word.
Meanwhile, Papermaster is countersuing IBM over his non-compete, claiming that IBM and Apple aren't competitors, and that a year is a lifetime in the tech biz, anyway.