The project is open source under Apache License 2.0. While the extension is published by Microsoft, it is a collaborative effort involving Microsoft, Red Gate (which previously had a private beta version of similar product called Visual Node), and individual contributors from the Node.js community.
It is now confirmed that two frameworks for application development will be XNA for games and game-like fullscreen, high-performance applications, and a subset of Silverlight 3 for everything else. Both frameworks support managed.NET code only — no native (C++) code support. Furthermore, the applications are sandboxed, and "unsafe" functionality, such as P/Invoke, is not available. A fairly detailed set of UI guidelines for developers has been made available as well.
The integrated web browser is claimed to be based on Internet Explorer 7 engine with some extra features, such as proper XHTML support.
An single centralized store will be available, called the Marketplace. It will include both applications and other media (such as music). The Marketplace will be the only way to install applications onto the phone (though, supposedly, "enterprise customers" will have some workaround). There will be an approval process for publishing applications on the Marketplace, and, aside from filtering out malware, it will also require that applications are "generally good taste excluding pornography, hateful/inflammatory speech, and gratuitous violence".
On the hardware side, the specifications will be tightly controlled for the benefit of developers. A standard set of hardware buttons is mandated on all phones ("Back", "Home" and "Search"). Screen size is limited to two standard resolutions: 320x480, and 480x800, and touchscreen must be capacitive, with at least 4-point multi-touch. Other requirements hardware requirements include 3D acceleration, GPS, and accelerometer.
Unlike past mobile SDK releases from Microsoft, a free version of development tools for Windows Phone will be available, named "Visual Studio 2010 Express for Windows Phone". A preview of that is presently available, complete with an emulator. In the future, a mobile-oriented version of Expression Blend 4, a designer-centric development tool, will also be available."