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Discussing the garbage collector (GC) that runs on Windows Phone 7 devices is helpful for the Windows Phone 7 game developer. Anyone who has programmed in XNA for Windows or Xbox 360 before knows the GC well.
One of the first things you must understand is the difference between value types and reference types. Value types such as int, float, Vector3, Matrix, and struct (this includes nullable types; a nullable type such as BOOL is just a special struct) live on the stack. The GC does not care about the stack. Well, technically, it cares slightly, but only to the extent that the system begins to run low on memory, and you would have to be trying very hard to get enough items on the stack to cause the system to run low on memory. So don't worry about calling "new Vector3()" or "Matrix.CreateTranslation()" in your methods that run regularly (such as Update and Draw) it is just a stack allocation and it won't anger the GC.