First the good news: Unlike certain smartphone platforms on the market, Windows Phone 7 will allow users to store data on SD cards, not just built-in storage space.
Now the bad news: You won’t easily be able to remove and replace that SD card.
That’s because Microsoft says Windows Phone devices will have special SD cards that offer high performance — and which are recognized by the phone as internal storage. Say your phone comes with 8GB of flash storage and a 8GB SD card. Basically the device will think there’s 16GB of internal storage. If you remove the SD card it might not be readable in other devices — and if you try to insert a new SD card your phone might not recognize it — or work properly, since important files and settings may have already been written to the original SD card.
Not all Windows Phone 7 devices will have SD cards, but if yours does have one it will likely be accessible in a slot beneath your battery. Microsoft just suggests you never actually pop out that card.