Windows Phone 7 brings all of that to smartphones...sort of. When you set up your phone, you enter the Live ID associated with your Gamertag to gain access to your Achievements, avatar, and friends list. Xbox Live-enabled phone games can award Achievements and points to your Gamerscore.
The experience, however, is somewhat disjointed. The main Games hub on a phone has a flat 2D image of your avatar and can only show you notifications about game invites or "it's your turn now" messages for phone games. To see a 3D representation of your avatar and to send or receive general messages on Xbox Live, you have to download a separate free application called Xbox Live Extras. This app doesn't provide a "Live Tile," one of Windows Phone 7's major features, to indicate when you have unread messages or game invites. It also doesn't support voice messages over Live, which seems like a natural for the phone platform.
There's a lot of untapped potential here. Microsoft needs to tie all of the Xbox Live stuff together into the main Games hub and get rid of the Xbox Live Extras app. How great would it be for a friend to invite me to, say, a game of on their Xbox 360 and have my phone buzz and pop up a notification, so I know to head to the living room and join them (or send a message from my phone to say that I can't play right now)? That's just not the way it works yet.
Windows Phone 7 supports only turn-based, asynchronous games (think of games in which you take discrete turns, like chess or Scrabble). Real-time multiplayer gaming would be a mess over 3G networks due to latency, but it could, and should, be enabled for Wi-Fi--if not over the Internet, then at least for local multiplayer play. Imagine using your Windows Phone 7 device as a small, remote screen for Xbox 360 games, or playing interactive games on your handset that work together with and enhance the game you're playing on your PC or Xbox 360. These are exciting ideas that no other phone platform can really offer right now, but Microsoft hasn't tapped into the possibilities.
The good news is, all the Xbox Live stuff is free. On the Xbox 360, Microsoft has a free tier of Xbox Live and a paid Gold membership that carries with it specific benefits, chief among them the ability to play online multiplayer games. On Windows Phone 7, as with Games for Windows Live, all aspects of the service are available at no cost.