Can somebody list out the tools needed to develop for windows phone? How do I test my app apart from the emulator? Are there test phones available? I don't want to go through the installation of VS 2010 express.
Everything you need is at http://www.microsoft.com/downloads/en/details.aspx?FamilyID=04704acf-a63a-4f97-952c-8b51b34b00ce&displaylang=en which includes a list of everything that gets installed. You sort of need to have some flavor of VS2010 installed.
You can download the test tools here (web installer).
If you don't want to use the web installer, you can download an ISO here.
You cannot test your application outside the emulator - only on the actual Windows Phone 7 device - WP7 apps run on a specific subset of .NET Framework that cannot be compared directly to any other .NET application type. The actual phone is only available to small groups of developers for testing purposes only and to Microsoft employees.
If you have a commercial version of Visual Studio 2010 installed, you don't need the Express edition.
You'll need Visual Studio 2010 and the Windows Phone 7 SDK/Tools. You can use your pre-existing Visual Studio 2010 installation, or use the bundled Express SKU. That'll install the project template and emulator into the IDE.
Once the phones have launched, you should be able to deploy to the phone, and run it there.