According to a BusinessWeek report, it seems they're pursuing a number of angles to entice software shops to help build out Windows Phone 7's launch catalog, ranging from offering free test hardware to simply paying cash, sometimes in the form of revenue guarantees that Microsoft will meet if apps don't meet sales goals in the Marketplace. Of course, there's not really anything wrong with Microsoft inorganically pursuing support for its ecosystem like this -- they've certainly got the pocketbook for it, and considering their come-from-behind position, they ought to be using any tool available to 'em right now to get this thing as ready as it can possibly be for app-hungry customers later this year.
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