This feature is now available in Windows Phone 8.
Need application settings/game progress backup.
Adding my voice to the chorus. I've stopped downloading/purchasing apps and games from the marketplace knowing that if my phone breaks (again), or if I upgrade to WP8 I will lose their progress. I spent hours upon hours playing Plants vs. Zombies on my original WP7 device only to lose it all when my device needed a warranty replacement. Windows Phone is supposed to be the ultimate gamer's platform? Unacceptable. I will adopt a competitor's product if this is not addressed soon.
I've wanted this for 2 years now.