There's plenty to like in the upgrade. The People hub has been improved because you can now set up groups, for example. Email now has a conversation view. There's finally multitasking...of a sort, that is. For now, it's really application switching, but that will change when apps are written to take advantage of the new multitasking capabilities. The new Bing Vision is essentially a copy of the remarkable Google Goggles app, and will give you information about products when you scan in their barcodes.
Overall, the interface has been cleaned up. There's now voice integration. Internet Explorer is upped to version 9. The list can go on, but it's pretty clear: With this upgrade, Windows Phone 7 is far more competitive with Android and the iPhone.
But it's still not enough, because "competitive" isn't enough. Given that Windows Phone 7 is so far behind both Android and the iPhone in market share, it needs to be better than both operating systems, and even with the Mango update, it simply isn't.
In addition, Mango doesn't solve one of Windows Phone 7's big shortcomings: A lack of apps. Microsoft might not like it, but apps sell phones. Until Windows Phone 7 has plenty more apps, people will continue to look to Android phones and the iPhone.
Microsoft has another problem with Windows Phone 7 as well --- salespeople don't push it. I've been to several stores where Windows Phone 7 devices are being sold, and the salespeople are uninformed about the devices' capabilities, and decidedly unenthusiastic about them. Talk to them about Android phones or the iPhone, though, and they're more than happy to give an enthusiastic sales pitch.
The upshot? When Mango hits this fall, Windows Phone 7 will be more competitive than it is today. But it'll still lag the competition.