Another email from Audible support, this time with a more positive message…
I understand that you are interesting in using the Windows Phone 7 with your Audible Content. I do apologize for the inconvenience but the Windows Phone 7 is currently not supported by Audible so the Audible files will not play on this device. There is no work around to transfer Audible files onto this device and no announced plans about when the device will be supported.
To make a device compatible with the .aa format means supporting our encryption, this protects the publisher’s copyrights as well as implementing key usability features, such as section navigation and resume playback. Although previous devices were supported by Audible, their has been alterations to the Windows 7 that does not allow the old Audible Air application to be updated easily and translated for the new OS.
Since this is the case, we are currently designing a new App for this phone and hope it will be available sooner than later.