The first update for Windows 7 is not the update you have been waiting for. There is no copy and past and there is no app acceleration. This update is simply sent to make sure there will be a "smooth update" process when the real first update actually arrives. In Microsoft's words:
“We made some improvements to the way we deliver software updates to ensure that the process keeps working smoothly for you.”
I do not have a Windows Phone 7, but I was told that Microsoft users will see the update message on their phone screen. The update process itself has to happen through the Zune software on a PC or the Windows Phone 7 Connector for Mac (if there are Mac users that own a Windows 7 Phone.)
There was no further information available what the update really does, but we would assume that at least one component of the update is to test the update process itself. Testing the process with a minor update that cannot break anything makes more sense than updating millions of devices with a major patch that can break the OS.
Get Windows Phone 7 apps from our downloads section.