When HTC launched the Touch Diamond (pictured on the right), just before the iPhone 3G, it was clear that the software was far from polished. The new TouchFlo 3D interface was intended to offer Windows Mobile fans (and Apple haters) the chance to benefit from touch-related delights similar to that of Apple’s iPhone, without having to go out and line Steve Jobs’ pockets.

But, as with so many Windows Mobile-based handsets, while the front end looked nice and the hardware impressed, it just didn’t come together as a coherent whole. The software was sluggish and frustrating to use and, more importantly, just didn’t mask Windows Mobile effectively enough.

It’s good to see, then, that with its latest phones – the Touch HD and now the second generation Touch Diamond2 (on the left in the photo above) – it’s started to focus more on the software than the hardware. So, while the core hardware and specifications remain the same (with just a few cosmetic and practical improvements) TouchFlo 3D has undergone a dramatic overhaul.

Slowly but surely, HTC has been transforming its UI into a snappier, more usable product. Here, it still suffers from the odd pause, but nothing like as bad as with the original, and – more importantly – most users will now hardly ever have cause to experience the pain of trying to operate the fiddly, old-fashioned Windows Mobile interface with a finger.

Indeed, with the introduction of a proper substitute for the Windows Mobile Calendar view, the contact detail screen (including text messaging and phone call history pages) and – at last – the alarm and clock screens, TouchFlo 3D is no longer the thin veneer that it once was – more timber cladding this time around.

The start menu is, finally, no more – touch the Windows symbol in the top left corner of the screen (or the new Windows button below it) and it’s replaced instead with the now-ubiquitous program grid view.

And those small hardware improvements are also worth having. It’s a slightly larger, heavier phone than the original, but this is compensated for by a larger 3.2in, higher resolution WVGA (480 x 800) screen and a battery with significantly higher capacity. The back is now flat, a microSD slot now replaces the 4GB of non-expandable memory that the original boasted and the camera resolution has gone up to five megapixels.

It’s a shame that the same cannot be said for Windows Mobile – the underlying platform is still Windows Mobile Professional 6.1 – and HTC hasn’t quite darned all the holes in its rather ragged socks. You still fall into it when adding a new calendar entry, for instance, and while using the File Explorer tool.

HTC told us that owners will have the chance to upgrade to 6.5 for free when it becomes available, but from what we’ve seen this still isn’t going to be the step forward that Windows mobile so desperately needs.

We’ll be posting a full review, complete with battery life figures and a final verdict early next week, but the early signs are good. Let’s hope the Touch Pro2 and Magic, when they arrive, keep up the good work.