This post is my first attempt at implementing the MVVM pattern on Windows Phone 7 using Silverlight for Mobile.
Prior to reading this post you should read Silverlight for Mobile on Windows Phone 7 InkPresenter Fun as a reference point for context and contrast.

1. The MainPageViewModel is added for MainPage.   Key points to note are:
• MainPageViewModel inherits from DependencyObject
• Strokes is a DependencyProperty
• Functionality from event handlers of MainPage moved into MainPageViewModel
• No current use of Dispatcher as currently no separate thread attempting to update UI thread.

 public class MainPageViewModel : DependencyObject
    {
        private StrokeCollection _strokes;
        private Stack<Stroke> _removedStrokes = new Stack<Stroke>();
        private Stroke _currentStroke;
          
        public MainPageViewModel()
        {
            Strokes = new StrokeCollection();
        }
      
        public StrokeCollection Strokes
        {
            get { return (StrokeCollection)GetValue(StrokesProperty); }
            set { SetValue(StrokesProperty, value); }
        }

        // Using a DependencyProperty as the backing store for Strokes.  This enables animation, styling, binding, etc...
        public static readonly DependencyProperty StrokesProperty =
            DependencyProperty.Register("Strokes", typeof(StrokeCollection), typeof(MainPageViewModel), new PropertyMetadata(null));

        public void BeginCapture(Point point)
        {
           
            _currentStroke = new Stroke();
            _currentStroke.StylusPoints.Add(GetStylusPoint(point));
            _currentStroke.DrawingAttributes.Color = Colors.Blue;
            this.Dispatcher.BeginInvoke(
            Strokes.Add(_currentStroke);           
        }

        public void CaptureStrokePoint(Point point)
        {           
            if (_currentStroke != null)
                _currentStroke.StylusPoints.Add(GetStylusPoint(point));
        }

        public void EndCapture()
        {
            _currentStroke = null;
        }

        private StylusPoint GetStylusPoint(Point position)
        {
            return new StylusPoint(position.X, position.Y);
        }

        public void Undo()
        {
            if (Strokes != null && Strokes.Count > 0)
            {
                _removedStrokes.Push(Strokes.Last());
                Strokes.RemoveAt(Strokes.Count - 1);
            }
        }

        public void Redo()
        {
            if (_removedStrokes != null && _removedStrokes.Count > 0)
            {
                Strokes.Add(_removedStrokes.Pop());               
            }
        }
    }

2. The MainPage code behind now becomes as follows.  Important points to note are:
• The Datacontext is now set to an instance of MainPageViewModel i.e _vm; 
• The _vm is called within each event handler to manipulate the view.

public partial class MainPage : PhoneApplicationPage
    {
        private MainPageViewModel _vm;

        public MainPage()
        {           
            InitializeComponent();

            SupportedOrientations = SupportedPageOrientation.Portrait | SupportedPageOrientation.Landscape;
           
            _vm = new MainPageViewModel();
            this.DataContext = _vm;
          
            inkTest.MouseMove += new MouseEventHandler(inkTest_MouseMove);
            inkTest.MouseLeftButtonDown += new MouseButtonEventHandler(inkTest_MouseLeftButtonDown);
            inkTest.MouseLeftButtonUp += new MouseButtonEventHandler(inkTest_MouseLeftButtonUp);
        }

        private void inkTest_MouseLeftButtonUp(object sender, MouseButtonEventArgs e)
        {
            _vm.EndCapture();
            inkTest.ReleaseMouseCapture();
        }

        private void inkTest_MouseMove(object sender, MouseEventArgs e)
        {
            _vm.CaptureStrokePoint(e.GetPosition(inkTest));
        }

        private void inkTest_MouseLeftButtonDown(object sender, MouseButtonEventArgs e)
        {
            _vm.BeginCapture(e.GetPosition(inkTest));
        }

        private void btnUndo_Click(object sender, EventArgs e)
        {
            _vm.Undo();
        }

        private void btnRedo_Click(object sender, EventArgs e)
        {
            _vm.Redo();
        }   
    }

3. The MainPage XAML now becomes as follows: Its important to note that:
• InkPresenter Now binds Strokes

         <Grid x:Name="ContentGrid" Grid.Row="1">
            <InkPresenter Name="inkTest" Strokes="{Binding Strokes}" Background="White" Height="652" VerticalAlignment="Top" />
        </Grid>

    <phoneNavigation:PhoneApplicationPage.ApplicationBar>
        <shell:ApplicationBar Visible="True" IsMenuEnabled="True">
            <shell:ApplicationBar.Buttons>
                <shell:ApplicationBarIconButton x:Name="btnUndo" IconUri="/Images/dark/appbar.minus.rest.png" Click="btnUndo_Click"></shell:ApplicationBarIconButton>
                <shell:ApplicationBarIconButton x:Name="btnRedo" IconUri="/Images/dark/appbar.add.rest.png" Click="btnRedo_Click"></shell:ApplicationBarIconButton>
            </shell:ApplicationBar.Buttons>
        </shell:ApplicationBar>       
    </phoneNavigation:PhoneApplicationPage.ApplicationBar>   

This implementation is now easier to write unit tests against then its predecessor.  One thing I am not happy with is the lack of use of Command and ICommand to route all commands to the MainPageViewModel using bindings.  I noticed that although ICommand exists in silverlight for mobile the Button, ApplicationBarIconButton and InkPresenter dont support the command property.  Initial thoughts would be to create a derived class e.g for ApplicationBarIconButton to provide a Command property but it seems like it is a lot of effort for little gain.  Anyone out there know if the Command prop and bindings will be supported on the user controls in Silverlight for Mobile?