Microsoft has finally shipped an update to Windows Phone 7. Unfortunately, this is not the long-awaited copy-and-paste update. For that, we still have to wait until March. No, this new update updates Windows Phone 7's update mechanism. It's an update to allow next month's update to actually work properly.
The update is being rolled out gradually, so it may take a few days before your phone alerts you to its existence. The update is also not available over-the-air; USB tethering to the Zune software (for Windows users) or the Windows Phone 7 Connector (for Mac OS X users) will be required, and prior to installation, a backup will be made of the phone. Now that the first update is available, Microsoft has also published an update history page, to allow updates to be tracked.
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