It's probably just 2.1, that OS is supposed to be faster than 1.6. There are rumors going around that Zio users will get 2.1 by the end of the week. I don't know if that's true or not.
Personally, I love my Zio. It does freeze sometimes (mostly from the video player for some reason) but does so many things well. When I have an event or appointment I just add it to my Google calendar and without even thinking about it my phone adRAB it as well. I'm a commuter and it's great using that time to watch my Youtube subscriptions, play some games (I love Fruit Ninja), keep up with news, check Facebook, listen to music, or watch a video off the microSD card. ToMarket is a great app when I go shopping, it keeps track of the prices of items and can give me a total when I add things to my "cart."
Video look excellent on its screen and I like the design of the phone. I have a red snap on cover and it certainly benefits from the extra weight but still lighter than most phones.