Copy and pasting on a Windows Phone 7 was, well, copy and pasting on a Windows Phone 7. It works more or less as you'd expect—extremely similar to the copy and paste function on iOS and many Android devices.
To test it, I pulled up a Wikipedia entry for Rebecca Black and attempted to copy the first sentence. All I had to do was tap the first word in the sentence to activate the copy function. After that word was highlighted, I was able to drag on it from either side to highlight the rest of the text I wanted to copy.
A copy icon automatically appears above the highlighted text, and tapping on it copied the material I had selected. I was then able to sign into my mail account and click a paste icon that appeared when I began to enter text. This pasted everything I had copied right into the body of my email. It was fast, easy, and intuitive.
So far it doesn't appear that you can copy anything less than a full word. For instance, if I only wanted to copy "Rebecca Bla," I still would've had to copy "Rebecca Black," and then modify it manually from there. This feature is available on the copy and paste functions for the iOS, Android, and BB6 phones I tested.
I would say that the new WP7 copy and paste experience is comparable to that on other smartphones. To try it out, I tested the function on an Apple iPhone 4, HTC EVO 4G, and a BlackBerry Bold. Of the four, the BlackBerry Bold presented the most significantly different experience, if only because it lacks a touch screen. But overall, I found it rather easy to copy and paste across all four smartphone operating systems.
To see the function in action, take a look at the slideshow above.