The two main ways to get paid through your WP7 app are by selling your app and by placing advertising in your app (excluding in app sales which I’m not sure are approved for Windows Phone at this point). If you stick with Microsoft for both then you will get paid in two different ways.
First, you can get paid by selling you app. To get paid, you will need to meet the minimum threshold of sales which at this point is $200. This means, Microsoft holds onto your sales money until you hit that threshold. This is irrespective of any ad sales you make, it has to be $200 in people purchasing your program.
Second, you can sell ads through Microsoft Pubcenter. Microsoft has made it easy to integrate ads into your program via the AdControl which is natively included in the tools released with Mango (SDK 7.1). All you have to do is create a pubcenter account, create an ad unit and then place the ID they give you into your control. To be paid through this service, you must meet a threshold of $50 and it is irrespective of any program sales.
In an ideal world, the ad revenue and the app sale revenue would travel through the same account contributing to the threshold and increasing the chances you’ll be paid more quickly. In a bureaucratic world, these are two MS departments with two totally different setups (as I was told in a form post either at the pubcenter or the app hub, can’t remember which now). For the foreseeable future, they are separate.
The above is if you stick with a total MS revenue solution. You can also go outside and use something like Google’s AdMob. I use AdSense for my web-site so I’ve investigated this route as it seems appealing, but I also don’t know yet if AdMob is paid separate than AdSense.
Thus far, I have revenue with multiple services but I haven’t met the minimum threshold in any to receive a payment. If I could only pool them it would work much better for me actually getting paid (total, of all services I think I’ve made $50 in revenue over a few months). :) I would seriously consider changing to a service that allows me to pool web ads, with mobile ads in the same account. Just to say, I never expected to make much, it’s more of a hobby project to see if I could.