Many folks have mentioned in their previews that Microsoft is inches away from an iOS-like clipboard implementation in WP7 right now. This idea comes from observing how the cursor works in the Office hub and elsewhere. Essentially, you press-&-hold near where you need a cursor in a body of text. Then, you can move it around to select text. The next expected step is a context-menu popping up with cut/copy/paste on it, in a manner similar to iOS but designed like other WP7 context bars. However, this does not happen & currently the WP7 customer is left with the inadequate smart-sensing system for help (it works similar to how smart-tags worked in previous Office versions on desktop Windows).
I was really pleased, then, to hear that Microsoft had figured out a better way and that it would be coming in an update soon after the world-wide launch of the first wave of phones. You see, the company has pulled this implementation straight out of the “canceled” Courier dual-screen booklet project. Now, Courier had the middle hinge to act as a temporary virtual clipboard, and WP7 doesn’t have one. So, where do the copied items go? Straight up, at the top edge of the screen in portrait and on the side opposite the app-bar in landscape orientations.