You can initiate connection from both PC and device (tap PC Synchronization in TouchXperience to etablish connection from device). You can connect via USB or Wi-Fi, but the first time you have to connect via USB so WP Device Manager can deploy TouchXperience and your device can get your PC IP address.

Windows Phone Device Manager will offer users the possibility to synchronize their PC files and folders with the ones on their phone.

It should work on any version of WP7 and currently supports the following devices:
HTC HD7, HTC 7 Mozart, HTC 7 Trophy, HTC 7 Surround, HTC 7 Pro, HTC Arrive, HTC HD2, Samsung Focus, Samsung Omnia 7, Dell Venue Pro, LG Optimus 7, LG E900, LG C900.

Features:

Applications management: view, install/uninstall homebrew applications

File management: explore device, exchange files with your phone

Send to Windows Phone (to send files, apps, ringtones, web links in one click)

Detailed device information (CPU, ROM, RAM, storage, network, battery, OS,...)

Add and manage custom ringtones

Send SMS, E-mail, notes directly from PC (without needing cloud services)

Take screenshots of the phone

Programming sends notifications to phone

Shared clipboard with PC and phone

Integration with Windows explorer (drag & drop, copy/paste, view apps icons and details)

Integration with Control Panel (Device Stage, task links)

Nice integration with Windows Vista/7 (jumplists, widgets, aero effects,...)

Initiate connection from PC or phone

Wireless connection support

Auto pairing (no need to enter PC or phone IP address)

Notify phone applications updates

Applications backup

Use your phone as a remote control (control mouse, keyboard and navigation in Windows Media Center)

Open marketplace for non-commercial applications (if developers are interested)

Requirements:

Registered or unlocked Windows Phone 7 device

Zune 4.8 or later

.NET Framework 4.0

Windows Phone Developer Tools