Windows Live ID Single-Sign-On on Windows Phone 7

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Is there any way to implement Single-Sign-On with Windows Live Id (hotmail account) in Windows Phone?

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Yes, there're a couple of options. A complete description is here:

http://blogs.msdn.com/b/eugeniop/archive/2011/03/24/authentication-in-wp7-client-with-rest-services-part-i.aspx

(Which uses a similar approach as described in the ACS sample)

and here (this one doesn;t use an embedded browser):

http://blogs.msdn.com/b/eugeniop/archive/2011/04/02/authentication-in-wp7-client-with-rest-services-part-ii.aspx

With the first approach, you can use any authentication method supported by ACS (not just LiveID).

ACS (Access Control Service) is a service in the Windows Azure Platform for identity management. Out of the box it allows you to federate identity with LiveID, Google, Yahoo!, Facebook and any Open-ID and WS-Federation/WS-Trust identity provider.

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I saw a talk at PDC about this - some details are here - http://oakleafmobile.blogspot.com/2010/11/sample-code-for-vittorio-bertoccis-wp7.html