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If MobiPocket was still an independent company I think it would be busy extending the MOBI format to allow it to display all (or most) of the ePub format. This would not fix the "don't render the markup correctly" issue, since this is the entire point of the MobiPocket approach, but it would allow MOBI to compete on a more or less level playing field going forward.
One way of looking at ePub is that it is a single target for publishers. This is how it is apparently viewed in the UK for example. An extended MOBI format does not break this approach, because ePub is the source but on the device you get MOBI. Just as today, the source is an OEB 1.0 ebook and the target is MOBI.
Another way of looking at ePub as at the reading device level, with the argument that reading devices are getting more powerful all the time and so can render ePub directly. Mobile ADE is the only current implementation of that approach. If FictionWise actually switches from eReader to ePub it will be (or might be) the 2nd. Note that other "ePub" software on handhelds is not even close to conforming to the standard (I'm not sure about Stanza, but I think it is in the largely non-conforming category). In most cases, if a small-screen device also supports MOBI then using Calibre for ePub to MOBI first will give a better result on the screen.
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