The new Windows Phone SDK 7.1 Beta2 (renamed from WPDT) can be used to develop Applications for both 7.0 and 7.1 version of Windows Phone OS releases.
Download Details – Microsoft Download Center – WPSDK 7.1 Beta2
The Windows Phone SDK includes the following
•Windows Phone SDK 7.1 (Beta2)
•Windows Phone Emulator (Beta2)
•Windows Phone SDK 7.1 Assemblies (Beta2)
•Silverlight 4 SDK and DRT
•Windows Phone SDK 7.1 Extensions for XNA Game Studio 4.0
•Microsoft Expression Blend SDK Preview for Windows Phone 7.1
•WCF Data Services Client for Window Phone 7.1
•Microsoft Advertising SDK for Windows Phone 7
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Supported Operating Systems: Windows 7, Windows Vista
•Windows® Vista® (x86 and x64) with Service Pack 2 – all editions except Starter Edition
•Windows 7 (x86 and x64) – all editions except Starter Edition
•Installation requires 4 GB of free disk space on the system drive.
•3 GB RAM
•Windows Phone Emulator requires a DirectX 10 or above capable graphics card with a WDDM 1.1 driver
The Windows Phone SDK 7.1 is compatible with the final version of Visual Studio 2010 SP1.