Paul from Super Site for Windows has taken a look at Windows Live. Here's a snip from this preview:
Sohn doesn't see it that way. "This is a way to extend the Windows user experience," he said. "There are already a couple of places where you see glimmers of what is possible. The first place we did it is desktop search. And that was a very simple choice: We decided to do deep Windows shell integration and the other guys [Google] chose not to. We used publicly documented APIs, just like any other application would, but the other guys [Google] decided to put everything inside a browser window and mix [search] results [between Web and file search]. We did pretty well with that."