Engadget and Gizmodo have posted up there previews of Xbox Live on Windows Phone 7. See the Engadget Preview and the Gizmodo Preview. Interesting to see Microsoft moving in to the mobile gaming market.
Ooh, cute how they got the avatars on the phones like that.. Wonder if the phones are actually rendering them in 3D?
I think they should be, the high end Android phones and the iPhone 3GS / 4G have some pretty good looking 3d games. A lot of smart phones out today are a lot more powerful than a PSP both processor and graphics wise.