Pros:
-GPU accelerated UI
-Zune integration (media player is better than anything on Android in terms of aesthetics)
-Office integration
-Outlook (contacts, calendar, tasks, etc.)
-Xbox Live integration
-MS controls the updates directly, not the OEM or carrier (though the carrier has some say)
Cons:
-Zune integration (limited codec support that will be fine for mainstream users)
-Closed ecosystem (requires sync software, rather than having drag/drop support, and supposedly won't even offer SD card support)
-You're stuck on the stock UI
-New platform which means some incomplete or missing features at the start (copy/paste, for example), as well as an immature app store that I'm sure will grow fast
-The browser does not offer decent support for HTML5 (it's based on IE7 with some IE8 elements)
Basically, imagine an iPhone from 2007 or 2008 (the locked down nature of it), but add in native support for MS's software (Office, Zune, Live). It looks to be a nice platform, but I still think it will fail. It doesn't offer what corporate users want (since corporate apps must be vetted inside an app store now), it's missing features from existing WinMo handsets, it's trying to be an iPhone but is about 2 years behind, and despite those limitations, doesn't compensate like Android does by being open.