WP7 doesn't use the card in the SD slot like your computer would. It's more synonymous with adding another disc to your RAID array.
More info: http://support.microsoft.com/kb/2450831
Microsoft/AT&T have done a poor job of messaging this to the users. The fact that AT&T advertised these phones as having "expandable memory" doesn't help any.
If a UI design presents a slot or button or knob to an inexperienced user, then you should expect it's going to occasionally going to get poked at. Humans are an inquisitive lot, after all.
And if some unique and irrevocable things happen that's also specific to your device, then you're going to lead an inquisitive user to have a problem. Particularly if the slot is commonly used for transferring data in and out of other similar devices.
Most folks don't encounter and don't poke at RAID disk arrays. Most folks do shuffle files and pictures in and out of handhelds and laptops and cameras via SD. If you're aiming for the former audience and your product happens to be bought in droves by the latter (and as is increasingly arising with SOHO and consumer-facing RAID devices, for that matter), you've missed your target product audience, and you're going to have product acceptance problems.
Worse for WP7, this particular case likely arises among the more inquisitive members of your target audience, and this is likely also the same group that can be your early adopters and your best proponents.
"It creates a single file system that spans the internal storage and the SD card." - Meaning that you don't worry about "shall I store this photo in the phone or in the card" and juggle disk space around after upgrading the memory.
Oh... It renders them unusable on any other device but the one you inserted them into...
> Microsoft/AT&T have done a poor job of messaging this to the users.
I think the OEM (was it HTC?) should have placed the SD slot under a metal cover you would have to unscrew before you even saw the card.
There are WP7 devs that are poking at this problem as well: http://forum.xda-developers.com/showthread.php?p=9247202