Microsoft has announced that it will preview its new mobile operating system, Windows Phone 7, ahead of official launch. According to a blog post yesterday by Terry Myerson, corporate vice president of windows phone engineering, Microsoft has begun sending out thousands of review units to developers and press.

“Starting today, thousands of prototype phones from Asus, LG and Samsung are making their way into the hands of developers over the next few weeks,” Myerson wrote.

Early reviews by press that have had a chance to spend some time with the new OS have been generally positive, but most are taking a wait-and-see attitude on Windows Phone 7.

Engadget got their hands on one of the prototypes running the new OS. That publication reports that Windows Phone 7, at least in beta, does not support copy-and-paste or third-party multitasking of apps.

Windows Mobile took a major hit this past year, losing a large chunk of market share to Android. According to the latest numbers from ABI Research, Microsoft’s Windows Mobile accounted for just 6.9 percent of worldwide smartphone market share in the first quarter of 2010. That’s down from 10.8 percent for the same quarter last year.

Microsoft recently killed its line of Kin social texting phones available through Verizon Wireless. Microsoft CEO Steve Ballmer said that the move would facilitate a shifting of all personnel and resources over to the Windows Phone 7 project.

The first Windows Phone 7 devices are expected to launch before the end of the year.