So here we go, Windows Phone 7 and all the appealing environment that comes with it - Windows 7, Visual Studio 2010, .NET Framework 4, Silverlight 4, Expression Blend 4, and what not! Don't think that this is optional and I chose all those, it's just the prerequisites for a Windows Phone 7. I love it.
The Windows Phone Developers can be a good start point for you. Actually, what you have to do for quick development start up is just download the developer tools from Microsoft here and kick it off! This is a little 3MB download file which then brings up over a 200MB of download. Initially I didn't know what this kit includes in all, so I installed Visual Studio 2010 RC, knowing it is required for WP7. But afterward it turned out that the kit brings Visual Studio 2010 Express with it. So now I have two VS2010-s on my machine (conscience won't let me remove either of them).
Now we're all set up to play with Windows Phone 7. What you need to know is that there are lots of fundamental changes compared to previous versions of Windows Mobiles - no local database support, limitations regarding controls (no TabControl for example), only 2 technologies can be used, either Slverlight or XNA (depending on what you're targeting), only C# is supported as a programming language.
So we may say that Windows Phone 7 is a completely new world and a great exposure on behalf of Microsoft.
Whoever disagrees is invited for a nice chess game and a discussion around the board ;) (kidding)