UPDATE 2012-02-01: A new and better approach to this is detailed in a new Visual Guide - Visual guide to Azure Access Control Services authentication with SharePoint 2010.
Using Windows Live ID as login provider for SharePoint is a really huge thing. It makes the scenario for public facing web sites, extranets etc. much more easier, for instance there is no need to maintain passwords and users in the same degree. For SharePoint 2007 there is no native support for this, so I built a custom Live ID login provider (available at http://spwla.codeplex.com), but SharePoint 2010 has native support for claims based access. And that is what’s on the menu for tonight…