Microsoft released Windows Phone 7.8 SDK, bringing Live Tiles to the mix. Sadly, there are no new APIs included, once again proving version 7.8 is more of a cosmetic update (rather than substantial upgrade of the platform). The SDK update adds Windows Phone 7.8 512MB and 256MB emulators, as well as Windows Phone SDK 7.1.1 update for those running a Windows Phone SDK 7.1 installation.
The update will not change your existing Windows Phone OS 7.1 emulator images, and any Windows Phone apps that you build using the Windows Phone SDK (with this update installed) will still target and run on Windows Phone 7.5. This update simply makes it easier to test how your apps appear on devices running Windows Phone 7.8…
So if you’re a Windows Phone developer looking to take advantage of Live Tiles you should proceed and get the latest SDK. If you don’t need that capability, you’re pretty much with the tools you’re already using. It’s your call…