I think the point here is that the developers themselves aren't generally the ones that are choosing to use XP: they're stuck on the platform that the IT department supports. Getting upgrades can be challenging, especially in a large corporate environment.

But if their job requires them to develop for WP7 then it's easy to procure a second Win 7 PC.

Back in 2002 I had two PCs on my desk. One I had Administrator access and where I could run Visual C++ and the Windows CE toolchain hooked up to a prototype voting ballot and the other that was connected to the corporate network where I could read e-mail.

At the time, of course, both ran the same OS, but I gather it's more or less the same idea.

If WP7 is his hobby, I assume using Windows 7 is not a big deal.