I'm somewhat amused by the way the mention of Microsoft's planned "multiscreen device", as well as the entire article linked to there, makes no mention of the Nintendo DS. It doesn't blend the screens together or have a folding screen, but it certainly has shown that consumers don't consider that a must-have (at least for more specialized devices). I'd argue that a phone with twice as much screen space via folding would have the potential to be successful even with a noticeable bezel -- or even a visible hinge -- between the screens.
ZTE Axon M phone is as you described, but it didn't really catch on. Reviewers of the device did not like the gap from the bezels. I think it hit a sort of uncanny Valley of a gap that the Nintendo DS didn't hit.
DS software was specifically designed to use screens as separate units (for example, actual game video on top, extra data on bottom), not as a unified screen, which helped.
There were other dual screen phones other than the Axon, off the top of my head I can remember NEC Medias W and Kyocera Echo (which was the first Android dual screen phone iirc). There was also a Sony tablet with dual screens, Sony Tablet P.
