Yes, precisely. I can't visually resolve pixels on my 42" 52 PPI TV at a normal viewing distance. I can't resolve pixels on my Nexus One at my normal operating distance unless I look really hard (252 PPI), but I tend to hold it ~12-18 inches away.

Of course, but the 10-12 inches they quote as normal operating distance is pretty reasonable as far as I'm concerned. So while clever marketing, I wouldn't call it false advertising.

Ding ding ding, we have a winner. Clever marketing. If you're wondering why people care so much, it's the MARKETING! I bet if I asked 10 non-geeks what a Nexus One was, at least half would have no idea what I'm talking about.