When making calls, display blacks out, although it still connects, I can't cancel the call or input numbers in cases where i am calling extension lines and it really is frustrating. Same goes with an sms arriving, before it shows briefly even when the phone is locked but now, it doesn't.
I just recently upgraded my OS to windows 7.10 and this is when these started. Is there a fix for this?
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Are you using a protective screen cover? If you do, it is possible that it activates the proximity sensor in the device which explains why the display blacks out during a call to prevent accidentally ending the call.
As for the SMS, do you mean to say that when the phone is locked, there is no notification that a new message received? Aside from updating your device, have you tried the steps provided here http://support.microsoft.com/kb/2606900 ?
I have tried replicating your concern. The phone should light up and the new message notification should appear on the upper portion of the screen.