If you dig a bit deeper in the latest Windows Phone 7 emulator (build 6176), you’ll find three interesting bits through the Settings, About screen. First, Microsoft is still calling the platform Windows Mobile 7.0 internally. Second, build 6176 is considered Release Candidate 1, meaning that Microsoft is getting close to the release to manufacturing stage (RTM), often preceeded by a couple of release candidates. And third, the emulator may give us an idea of how much space the operating system takes up without any data or apps added: subtracting the total storage from the available storage yields us about 120MB.
Thanks for the tip, savage25rcracer.