If you bought Xbox video, and you use Windows Phone 7 or Zune, you're going to be able to continue using it until Feb of 2014. After that, nada.
Microsoft gave some crap about how they improved on the video and offerings. Translation: if you wanna keep using Xbox content, get a new Windows Phone device, preferrably the Lumia which Microsoft effectively own.
Zune? I get that. But Windows Phone 7. Not so much. It's still pretty new. It's the OS that has been delayed over and over until Microsoft managed to ship it against some already entrenched smartphone heavyweights. It, along with Blackberry, had owned the mobile market. One theory I've got on why Microsoft is chucking WP7 now. There were not many takers to begin with. Kinda like Zune I guess.