Pros: Good interface, tight social network integration, solid core apps, great performance
Cons: Limited application selection, Zune PC software compulsary, interface beginning to feel stale
Even ported to my phone, it always ran smoothly, and the transitions are great. I also think that the built in functions are better than Android's - that is, the contacts, phone, messaging, and (although not totally) the browser.
The issue I had was that once you want to do anything that isn't built in, you're really limited.
There are some good games available, but they're mostly old ones and they're almost all costly. Games that are 60p on Android are £5.
Some apps are available in official form (e.g. Twitter) but are terrible compared to the Android version.
Some apps just aren't available at all.
For some apps, there are equivalents to the ones on Android and/or iOS but they're nowhere near as good.
There are some features which are missing (one example I found was the 'find on page' function in the browser) but you can't add them on because Microsoft won't allow it.
You're limited by what you can transfer to your phone because you can't mount it as a USB drive, so you're forced to use Zune to copy content over (which isn't a horrible application, but is just another limitation).
There's no Last.FM scrobbling on device because the Zune application doesn't allow third party plugins.
The live tiles are great in theory, but still not all third party apps use them, and those that do rarely feel as well implemented as the Microsoft ones (take a look at the Engadget app's tile - it's terribad)
If you're somebody that just uses your smartphone to browse the web, text, talk, and play games, WP7 might be great for you. If you want to do much more than that, it's quite frustrating when you find out the limitations.
I have to give Microsoft credit for the OS in some ways (I think the fact that it runs smoothly on Snapdragon S1 chips shows that Android is not well optimised, though this will improve from 4.0 onwards) but in all, I felt that something was just missing from the operating system, similar to what Josh Topolsky said in his review for The Verge. Windows Phone 7, at first glance, is a beautiful OS. Delve more deeply, however, and you'll discover that much of it can be summed up in one word: limited.