Live Mesh is the brainchild of Ray Ozzie, the new chief software architect at MS and was apparently 2 years in the making.
Microsoft's "Live Mesh" uses the Internet as a data hub and synchronizes files across computers, phones and other devices.Live Mesh is open to all developers as it is supposed to be cross-platform and cross-browser. It will be based on standard protocols and feeds the Web 2.0 crowd embraces like Http, RSS, REST, ATOM, JSON and FeedSync.
Microsoft plans to release Live Mesh in a widely-available test, or "beta" version before the end of 2008.
More details in this earlier story and on ZDNet. ZDNet also has a couple of screenshots of Live Mesh.