A recent study pegged developer interest in Windows Phone as rising. It's still not at the level of iOS or Android, but the interest is there. Microsoft is keeping the flame alive with constant updates like today's that adds in a few more key features that developers could use.
The Windows Phone SDK 7.1.1 announced today adds two new features that aren't ground breaking, but useful nonetheless. They add the tools for developers to make apps on 256 MB devices and develop on machines running Windows 8. Those are the major updates, but Microsoft has added in a bevy of smaller updates as well. They are as follows:
The Visual Studio IDE is patched to enable selection from a list of emulators, and launching it (note that the WPSDK can only support connecting to one at a time, though)
The Windows Phone [512 MB device] emulator image is updated to use build 8773
A second, new emulator device image is included, allowing you to emulate running your app on a 256 MB device
The Microsoft Advertising SDK is updated to the latest version (previously only available as a separate install), which fixes some issues devs were encountering at runtime
IntelliSense now supports specifying the 512 MB device requirement in your manifest file, should you choose to opt your app out from running on the new 256 MB devices
Language support is again consistent both in the IDE (the 7.1.1 Update supports all 10 of the WPSDK 7.1 languages) and in the emulator OS (Malay and Indonesian have been added)
As previously mentioned, the new update allows developers to build apps on Windows 8. There are still a few problems with this though. Development of apps is not officially supported until the RTM release of Windows. Developers should also expect a dip in performance if they have Hyper-V enabled.
So check out the newest update and get to building those apps. Windows Phone 7 isn't going to develop for itself.