No restart is necessary. Simply plug your phone in and you should see the phone show up in Explorer.

On top of the tethering support that official was said not to exist but did WP Central have found another interesting Windows Phone 7 hack that allows you to enable a mass storage mode. That was aloso said not to exist.

The hack is very simple and only takes five minutes and will convert your Windows Phone 7 device into a USB drive. But unfortunately the hack is currently computer specific and will only allow you to upload files from the modified computer at the moment.

Instructions from WP Central

The first thing to do is edit your PC’s registry. Feels good, right? Like the old Windows Mobile days.

Open the registry editor on your PC by typing regedit in your Start menu
go to HKEY_LOCAL_MACHINE\SYSTEM\CurrentControlSet\Enum\USB; search forZuneDriver

Now you will modify three entries (note, if you have multiple WP7 phones, you have to do it for each one)

Change ShowInShell from 0 to 1
Change PortableDeviceNameSpaceExcludeFromShell from 1 to 0
Change EnableLegacySupport from 0 to 1
No restart is necessary. Simply plug your phone in and you should see the phone show up in Explorer

Via WMP Power User Via WP Central