First Download Windows Phone 7 Development SDK tools and install. Here is the link where you can download from Microsoft site.http://silverlight.net/getstarted/devices/windows-phone/
Once you installed SDK. Fire up the VS.NET you will see 3 type of project Templates
1) Windows Phone application
2) Windows Phone List Application
and 3rd one is Class Library Application. Here i am going to create simple Windows Phone Application which takes two inputs as number and add them.
Here is my XAML code and UI
Now run the application
I think Microsoft no need to copy Iphone here . Silverlight with Windows Phone 7 IPhone going to face big competition here.