keep your eyes peeled to see when the update hits, for right now nothing is confirmed. there for answering your question would be impossible

 

I have froyo and as far as I can tell, the inverted axis problem is still here.

 

Still there but its improved. You have to work at it to get a flip and in normal pinch zooming and other typical gui inputs it pretty much works without drama. Basically before where you had to be careful to avoid crossing axis now it seldom happens without trying to work around it. This could just be with my style of using the screen but others are reporting a similar view. Not fixed but better.

 

How about the issue with the menu buttons not responding unless one presses just above them to get a response... is this fixed with Froyo?

 

It definitely does not. I have not ever noticed any issues with touching the screen and I play many games. The only problem I have with the screen is that it is not great in sunlight.

 

It's fine if you use the brightness level app to max out the brightness though. Screen does seem a bit smoother with 2.2

 

The Samsung Galaxy S may be the phone your looking for. They claim it can push around 90 Million Triangles per second and plus has a super AMOLED screen which is exquisite. This is the only android phone I've been drooling over since I got my n1.

Samsung's Galaxy S has four times the polygon power of Snapdragon -- Engadget

 

It seems to be a lot better. In fact, I have had a few un-responsive button presses, because I was pressing them too far above, as I had been used to on 2.1

 

To be honest it's not the screen that kills gaming, it's the devs that kill gaming. What I mean is that there really are no multi touch games rolling out there.