How Xbox Live Works On Windows Phones 7 Series ... ows-phones-7-series

According to the official press release, not all that much. Accessing Xbox Live through the Windows Phone 7 Games hub will allow you to collect achievements, building your Gamerscore on the go, check out Xbox Live leaderboards, and manage your friends list. You'll be able to play certain turn-based games, though not in real-time - one player takes a turn, and then waits for the other to receive it and respond. And you'll also be able to look at your Xbox Live avatar, which you can do with any phone with a web-browser right now anyway.

My opinion:
Xbox Live provide just turn-based game to WM7, but not 3G/Wifi real time multiplayer game as iPhone game.
Turn-based game can be a very good game, but just waste the Xbox Live powerful community and mobile capability of 3G WM7 phone.