I might be in the minority here, but i've always thought the name itself is a large part of the problem, illustrated by what your boyfriends roommate said. The average user sees the name 'Windows' and they most likely think it's actually full blown Windows on a phone. The next thought their mind automatically jumps to is bloated, crashes, a taskbar, blue screens and various other Windows cliches.
Microsoft should have done what they did with Xbox, arguably their only 'cool' brand, and have the name have nothing to do with Microsoft or Windows. They usually design their software and tag it with various rather cool sounding code names, and then change it to the long winded generic stuff when it's released.
Maybe Windows Phone, like movie franchises, needs a reboot, complete with a new name. Probably never happen though.