Engadget has previewed Redmond’s upcoming Windows Phone 7 and it appears that the new OS shows promise.

Of course, Phone 7 is still a couple of months away, so some aspects are still a bit rough around the edges. Actually, it’s unfinished, but it still offers a glimpse of what to expect.

Engadget liked the Zune-esque UI, as well as some innovative features and services. Improved Office support is a very welcome feature and Microsoft has also managed to improve the browser, which is apparently on a par with the iPhone 4.

All in all it seems like a major improvement over Windows Mobile 6.5 and it could make Microsoft competitive in the mobile market once again, provided all goes well, of course.

Check it out here.