@Paul H, How would you (or anyone else reading this) have gone about things at the time? Or how do you think Neil, Nick and co. should have gone about things? I'm genuinely interested.
Should the original 12 Time on Earth songs (I'm including Lost Island and Stare Me Out here) have been quickly released as a solo record in late 2006? Perhaps with a quick low-key 8-10 date Australian & New Zealand tour and a few TV appearances?
That would have allowed them to hold off on a reunion announcement until 2007, and perhaps released a 4-track EP of the actual new Crowded House songs, followed by a proper album when they were ready?
Should the 12 Neil & Nick songs have been shelved completely? (at least until further notice). What if they were all re-recorded with Matt replacing Ethan's drum tracks and Mark replacing most of the guitar and adding his backing vocals? Would that have made it more of a Crowded House album to you?
It's an excellent question, isn't it? Neil really did put himself in a spot when he decided that he did want to be back in a band and that that band could only really be Crowded House.
The cleanest solution to me, would have been to release Time on Earth as a solo album and tour it as such, even if only briefly. I know that tours can be important for selling albums but at that stage of his career Neil was pretty much preaching to the converted only; that is, he was only selling albums to his hard core fan base and only those people were catching him on tour. I don't think he'd have lost sales of the album if he hadn't toured it extensively. As you suggest, he could then have issued a four-song EP of the new CH recordings as a teaser for a full-scale reunion. CH could then have toured with a handful of new songs to add to their set list, giving Neil some time to write more material. However, I totally get that this path would not have immediately addressed his desire to be back in a band and would have been frustrating for him.
I think the album didn't deserve to be issued and abandoned (although later events - I'm thinking about the fate that Lightsleeper suffered after Neil, um, decided he wanted to be in a band) suggest he could have done this. Of course, he later issued Out of Silence with no follow up tour and I don't think that hurt sales either.
I think Neil suffered one of his moments of indecisiveness: once he'd decided he wanted to work with Nick on a new album he needed to make a decision before recording had started as to whether it was a solo project or a CH album and stick with that decision even if he regretted it. In the end, he vacillated and we ended up with what I consider to be a very unsatisfactory solution.
I'm sure Neil would tell me to stop being to so hung up on it all and just enjoy the music but that just seems to ignore or demean the idea that Crowded House meant something. Neil addressed this issue early in his solo career when he confirmed that Parlophone had asked him to continue using the CH name and he'd refused, saying that he was aware that fans had had a special rapport with the band and that it was disrespectful to the relationship they'd had with their fanbase and the work that the other members had put into it by continuing to use the name. He gained an awful of respect from me at the time, respect he lost when he chose to issue ToE as a band album, going back on all he'd said.
I do feel that Neil hurt the reputation of his solo career by not issuing such a great record as a solo album, and I do think he undermined the idea of Crowded House by issuing the album as a band album which, personally, I find very disappointing given what CH means to me (see what I did there?). Perhaps Neil feels uncomfortable or frustrated by the idea that CH means a lot to some people.