Microsoft has released Windows Phone SDK 7.1.1 Update

The Windows Phone SDK 7.1.1 Update provides additional functionality to the existing Windows Phone SDK 7.1 software to enable mobile developers to better target applications for 256MB Windows Phone devices. This update includes an updated 512MB emulator, as well as a new 256MB emulator image, and Intellisense support to communicate device targeting preferences. Once installed, the WP SDK 7.1.1 update allows you to decide which emulator you would like to deploy your app to.

Note: This is a pre-release version and does not contains "GO LIVE" license. You are not allowed to publish Windows Phone applications to Marketplace using this update. Do not install it on primary development machine.

The Windows Phone SDK 7.1.1 Update includes the following

Updated 512MB Windows Phone 7.5 Emulator
New 256MB Windows Phone 7.5 Emulator

  Windows Phone SDK 7.1.1 Update - CTP