Easier to connect and share
Threads—Switch between text, Facebook chat, and Windows Live Messenger, within the same conversation.
Groups—Group contacts into personalized Live Tiles to see the latest status updates and quickly send a text, email, or IM to the whole group, right from the Start Screen.
A smarter approach to apps
Multitasking—Quickly switch between apps while preserving battery life and performance.
Improved Live Tiles—Get real-time information from apps without having to open them.
Web that goes beyond the browser
Local Scout—Provides hyper-local search results and recommends nearby restaurants, shopping, and activities in an easy-to-use guide.¹
Internet Explorer 9—Browse with our built-in version, plus support for HTML5 and hardware-accelerated graphics
Plus, you’ll enjoy ringtones and more in this update. With Windows Phone, the great features just keep on coming.
Watch Windows Phone 7 in action
Source: Windows Phone Insider