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I think HTC probably underestimated both demand and samsung's eagerness for the mobile market.
As far as them using a competitor's product, samsung's own phones are mostly using the better super amoled screens so it would actually be in samsung's interest to sell a lesser version to htc as it would put their own models in a better light while making more profits for their screen division.
One thing I have never really got with most of these screens is what is the big deal with the ever higher resolution on these relatively small screens, it seems like a waste of battery life for nominal gain since there are limits to the size people will want things like text anyway.
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