DailyTech reports Microsoft has rolled out copy & paste support in the latest developed build of Windows Phone 7:
In the Windows Phone 7 build 7.0.7338.0 (current release version is 7.0.7004.0), released first to developers with Samsung Taylor's, copy/cut/paste is not only fully working, but is easy to use.
In most of the core apps mail, IE, Word, etc you tap a word to highlight it. Once highlighted, arrows appear on either side of the word, that can be used to include more words. An icon appears above the selection that allows it to be copied to the clipboard. In messaging and some other apps, getting to the selection process is a bit trickier, but still reasonable. You first have to long-press a particular message. Then you get a hidden menu that includes the option to start making a copy selection.
Once you've copied your desired text, pasting automatically appears as an icon option in the top row of your keyboard.