Charlie Kindel, who sets out Microsoft's Windows Phone developer strategy, explained in an interview that Windows Mobile Phone 7 Series will not support multitasking, for the same reasons we've heard before: to preserve battery life, and to keep the phone responsive at all times.
Of course, like on the iPhone, this is an arbitrary limitation; Windows CE 6.0 is fully capable of multitasking, and like on the iPhone, several applications can, in fact, run in the background. The restriction only goes for third party applications. Things like the music player can continue to play in the background, and what's interesting is that for instance Pandora could hook into this music player backend so it can also continue to play in the background.
"Apps that run arbitrarily in the background create an end user experience where battery life and responsiveness of the system becomes [...] inconsistent," Kindel said, "We focused on getting a set of experiences right where we didn't have to support [multitasking], but we will over time."
In other words, there's some light at the end of the tunnel: Microsoft is working on getting multitasking on Windows Phone 7 Series, but it won't be part of the initial release of the software and/or devices.
What will be interesting is whether or not Apple will add multitasking to the iPhone, something rumours say could come with version 4.0 in the summer. As usual, Apple has said nothing about this yet, so we'll just have to wait and see where this goes. It would be a major kick in the butt for Microsoft, though, if Apple were to release 4.0 with multitasking support.