The screen of a smartphone is the point of communication between the user and the device. I find annoying to interact with 2.6” QVGA screens on devices like the N85 or N86, it is so tedious to select, navigate, and scroll that I can’t use a device without a touchscreen anymore. In my opinion, a high-resolution, big screen makes a device more enjoyable and overall better.
One of the annoying parts of the Nokia N97, for example, is that aside from its processor being slow, the resistive screen is as unresponsive as it could possibly be. Resistive equals annoying. I know some might argue that capacitive devices can’t be used with gloves, but other than that, resistive is just the predecessor of capacitive. I think that the iPhone has proven that resistive is what people like, think of a resistive iPhone, the rate of satisfaction wouldn’t be near the 99% that Apple has achieved today, resistive is annoying!
About LCD, there is nothing wrong with it. However, Nokia is supposed to be the leading manufacturer, the one who innovates. Nokia, like on many things, is behind on screen tech. Every device from the 5800 should have had a capacitive screen, and every high-end device like the N900 and N97 should have had an OLED screen just like the Nexus One has. Just to show the difference, I have taken a picture comparing the same picture on the amazing 3.7” AMOLED screen of the Nexus One and the 3.5” of the N97.