Windows Phone 7 by default (in mango) will read text messages to you if your device is Bluetooth linked to an audio device (like your car stereo). I found this out while I was looking for an app that would do this for me while driving. What I found was, this is supported natively with a few settings changes. You can tell WP7 to read text messages to you under a few different circumstances (or turn it off all together). The settings for what scenarios these are read to you are:
To enable this, follow these steps:
If you have any issues with the voice recognition, also check “Enable speech recognition over the network” which should be the first option on the Speech settings (in Mango).
When a new text comes in, the phone will ask you to read it or ignore without you having to hit anything which makes it very convenient while driving/being hands free.