Looks like they will be able to get a 7.8 version.
Big deal! So you get a new tile size, big whoop. None, NONE of the new tech in Windows Phone 8 is available to even current phones on the market today which have been obsoleted by today's announcement.
Also, since the core of Windows Phone 8 is different than Windows Phone 7 it's doubtful that updated, and more importantly, new apps will be supported or ported to Windows Phone 7.x.
So this becomes a double whammy for recent and current buyers of Windows Phones. No new operating system and probably no new apps go forward.