I want to make available my windows phone 7 app to a specific community like my collegues in office. And the app would be accessing internal webservices which is available only in intranet. I am not sure about how the current Windows Phone 7 app certification would test this kind app and marketplace would support this kind of app distribution.
Please let me know.
You can now publish an app as "Hidden" and it will not show up in Marketplace searches. Users have to have a link to install the app.
As far as functionality that is only going to work when connected to your intranet, make sure you handle errors that would occur outside the intranet, and add a note to testers when you submit the app, letting them know that it will be published as hidden for a limited audience, and that some (or even all) of the functionality will not work outside the intranet environment. This is one of the reasons that they implemented the hidden publish option.