TouchStudio is an app developed by Microsoft Research that lets you create custom apps for Windows Phone right on the phone itself.
It has seen remarkable progress since its release a few months ago. The last update gave it access to sensors on a Windows Phone device as well as the ability to take screenshots within its own apps. The 1.2 update that appeared on my phone this week adds the ability to program animation using sprites. It also lets you write software that can login to your Facebook account and directly interact with it to post photos, text and links.
TouchStudio continues to open up the possibilities of what can be done with a Windows Phone.