At the Mobile World Congress, Microsoft has announced that new features which people had been asking for from day 1 of Windows Phone 7 launch such as copy-paste and multi-tasking are coming to Windows Phone 7 this year. In addition to that, they also announced that the about to be released Internet Explorer 9 will also make it to Windows Phone 7.
Copy-paste was something that was severely missing when Windows Phone 7 was released - and something for which Microsoft was criticized for leaving out. At that time they promised an update soon which will bring copy-paste to Windows Phone 7. They pushed an update to the SDK which allows for copy-paste. In March, though, they are pushing an update to phones running Windows Phone 7 which will give them the copy-paste functionalities.
Another possibly big update that is coming is the browser. Microsoft has recently released Internet Explorer 9 RC and they have said that it will make it to Windows Phone 7 as well. Like the desktop version, it will also have hardware acceleration.
And finally Microsoft has decided to extend the multi-tasking capabilities of Windows Phone 7 to third party apps as well. Earlier Microsoft limited multi-tasking to only system apps and excluded third party apps from it out of concern for battery life. It seems like Microsoft has figured out a way to do it without consuming too much battery. Windows Phone 7 handles multi tasking using a card interface - like the one we saw in WebOS.
Microsoft also showed a technology preview of Windows Phone 7 and Kinect integration for Xbox. It looks quite nifty but there is no word on when this will be ready.