It's running from internal memory with all services unlocked. I actually prefer its interface and stability to that of Android. It's amazing that this phone (which is not meant to run this operating system... or even Android) is actually running WP7 faster than native WP7 phones.
Also... it's not technically legal. In order to unlock the live services, I had to call Microsoft and ask for an activation key for my "HD7."
Here's a
video.
