I just read a nice article from Scott Gu’s Blog: Building a Windows Phone 7 Twitter Application using Silverlight.
Scott builds two samples mini-apps (an Hello World and a simple Twitter Client). The integration with Visual Studio Designer seems to be quite good, you even see the phone while you’re designing! You still have the entire .NET to harness, including WCF, Silverlight, events, multi-threading, etc. .
This definitely beats iPhone development any day!