If you want a rather painless way to side load apps onto your Windows Phone 7 device, here's how to do. To start, you'll need a few tools:
Zune Desktop (Windows only for now)
A Windows Phone 7 device (or, you can use the emulator)
So here's what you do once you have all of these materials.
Run Application Deployment from the Windows Phone Developer Tools entry in your Start menu (on desktop)
Select Windows Phone 7 from the drop down
Hit browse, find the XAP application file on your computer
Make sure your Windows Phone 7 is connected to Zune software, and that the screen is unlocked
Hit deploy and wait 5-10 minutes
Update : So it turns out that this may only work on devices that are assigned to a developer's account. The particular device we were using is a pre-release review unit. While it's not a development device per say, it came preloaded with several apps that aren't yet on the market, leading us to believe that the phone has been associated with a developer account to get those apps side loaded.
We'll update this post with new info as we get it, but it may look like side loading apps this easy on Windows Phone 7.
(Thanks for the help, Babaroga)