This is a nice little video walkthrough of Windows Phone 7 straight from the Mobile Word Congress in Barcelona. You'll notice right off that it appears to be based on Zune, but it is more powerful and therefore won't be a "Zune Phone."

It looks like a pretty major step forward for Microsoft but we can't say right off that we like it. Actually, it looks a little confusing. We'll have to wait until we get our hands on one to make a final determination but we're glad to have some news from Microsoft. They've been quiet in the mobile space for awhile.