According to a recent report by ZDNet's Mary-Jo Foley, Microsoft's first "major" Windows Phone 7 update - code-named "Mango" is expected to hit Windows Phones any time late summer next year; namely August or September 2011. Following the previous rumors of two upcoming minor updates, which are expected for January and/or February, Mango will precede Windows Phone 8 (according to Foley - codenamed "Apollo") which is slated for late 2012. According to Foley's source, the Mango update is a kind of Windows Phone 7.5 important and even states, that it may even be named that when it debuts.
According to ZDNet's tipsters, Mango will add Silverlight run-time and HTML 5 support to Windows Phone 7, as well as Far Eastern language support and other features and functionality - yet not detailed.
As always, take the rumors above with the typical grain of salt since none of the information are confirmed or official in any way.
Cheers ~ Arne