Also WP7 is not backward compatible with 6.5, nor does the sdk resemble anything from 6.5 nor are the dev tools the same.

All Microsoft did was release into production an incomplete sdk and a new incomplete mobile os to get some early adopters to point out what is missing and broken... In other words they did what they usually do release beta use consumers to beta test try to get a drop on the market, fix and make product complete in the following 12-18 months after release.