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No SD card.

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First off, Microsoft had never intended Windows Phone 7's storage to be expandable, swappable, or removable...

We're told that on the first boot after a reset, the phone checks the inserted card and formats it -- but that's not all that happens. One of our tipsters reminds us that the "S" in SD stands for "secure," and though most platforms don't make use of SD's security features, Windows Phone 7 most definitely does. After the format, the phone randomly generates a password that it stores in its internal Flash and then uses to secure the card, essentially bonding the card with the phone. By its design, a password-secured SD card (or microSD card in this case) can be read only with the password; otherwise, your only option is to erase it.

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What we've learned from our tipsters and from documents culled from Microsoft, Samsung, and others is that the big issue is random access performance -- a figure that isn't taken into account in a card's class rating. Ironically, Microsoft discovered in its testing that cards with higher class ratings actually performed worse on Windows Phone 7 because the tweaks card manufacturers make to achieve high sequential throughput can actually hurt random access times.