Microsoft on Tuesday offered a preview of the first major update for Windows Phone 7, the platform the company is counting on to save it from irrelevance in the key smartphone market.

The update, for now code-named "Mango" until it officially becomes Windows Phone 7.1 when it launches in the fall, is meant to help Microsoft fulfill its mission to "redefine the smartphone," according to Andy Lees, president of Microsoft's Mobile Communications business, and adds a whopping 500 new features, from major improvements like multitasking to transparent back-end services.

Lees spoke at a press event which, in keeping with the company's attempts to position itself as just as cool as Apple, was held at a boutique hotel in New York City's trendy Tribeca district. The guests, mostly invited bloggers mixed with a smattering of mainstream tech media, were served hors d'oeuvres and chocolate covered strawberries.

Lees said most of the updates in Mango are intended to create a mobile experience that features "less clutter, more clarity" and "a people-centric approach to communications." To that end, the bulk of what Mango does is unify and cross-feed data and messages from social networks, messaging systems, apps, e-mail, and even voice. "With Mango the message always gets through," said Lees.

A new feature called Threads lets users glide between text, Windows Live Messenger, and Facebook chat within the same "conversation." A feature known as Groups lets users receive and send messages from predefined social or business circles directly to and from the Smart Tiles home screen, and Contact Cards have been enhanced to include feeds from Twitter and Linked In, in addition to the networks they previously supported. Local Scout, which is integrated with Bing, yields hyperlocal search results for restaurants, shopping, and entertainment.

For power users such as road warriors, Mango adds long-awaited multitasking, which lets users move freely between applications and pick up and resume where they left off without having to restart the app, and 4G wireless speeds. And for security conscious enterprise customers, Mango adds support for various rights management technologies. For example, it lets authorized users open e-mails tagged with restrictions such as Do Not Forward or Do Not Copy. It also beefs up integration with authoring and collaboration tools like Office 365 and Lync.

Web browsing is enhanced with native support for Internet Explorer 9, which on Windows Phone will drive hardware accelerated graphics rendering just as it does on the PC. "It's exactly the same," said Lees. During what Microsoft said was a live demo, a Mango-equipped Windows phone rendered HTML5 graphics at 27 frames per second, while an Android device managed just 10 FPS and a Blackberry Torch clocked in at just 4 FPS. An Apple iPhone choked on the test altogether.

Windows Phone badly trails RIM, iOS, Symbian, and Android in mobile OS sales, according to the most recent data from Gartner. But Microsoft isn't just counting on more features to climb out of last place—it believes key new relationships with hardware makers will also help. Mango will be the first flavor of Windows Phone that ships aboard devices made by partner Nokia. Acer, Fujitsu, and ZTE have also joined the ranks of mobile OEMs that will produce Windows Phone 7 handsets.

Microsoft on Tuesday formally released developer tools for Mango and said the update itself will be ready "this fall." Company reps declined to be more specific about the launch date.