Windows Phone 7–Push Notification

Windows Phone 7 offers push notification feature, which helps you to avoid polling server for updates.  Any app can subscribe for push notification.  There are three types of notification.

1. Toast – A notification shown at the top of current screen.  Like the SMS alert shown.
2. Tile – The tile image or data in tile updated.  Like the Email / Message count updated as and when they arrive.
3. Raw – This is XML data send to the app to process.  This is available only when application is running.  The application can process the data in the manner it want.

How it works

1. When the Windows Phone Application start it register itself for Push Notification with "Microsoft Push Notification Service", to get unique URI for the device and for the App
2. The Windows Phone Application passes the URI to it Cloud Service.
3. Cloud Service sends notification with URI to MPN.
4. MPN routes the notifications to devices.
5. The device receives the notification and interoperates.

URI is unique for each device and application. 

Ref: Yochay kiriaty blog