From Ollie's blog:

 Microsoft has launched its ThreeDegrees beta. It's midnight and I'm tired, so I haven't installed it but I went through the product tour and it looks fairly nifty. The bit I don't get is why it is a so separate from Messenger. To me the idea of building live communities in real time between groups of people is what Messenger should probably be about. I really like the way ThreeDeg lets you create groups of people, and it's a much more realistic mapping than the linear category system in Messenger at the moment, which really doesn't encourage anything but one-on-one communication. ThreeDeg seems like a natural extension of web-based communities into the IM space. I like the idea of creating a community and then being able to interact with each other through email, IM, music, files, images, etc. All seems very natural to me and I like what I see.

Also glad to see the site is built using ASPX, including ScottM and RobH's ASP.NET Forums! Maybe in a few months' time we'll see a version of the ASP.NET Community Starter Kit that integrates with ThreeDegrees so community members can create sub-communities via IM. :-)

Yeah, well, I've installed it and it isn't that cool and made me feel like I was twelve (which may or may not have been a bad thing). First, it was buggy - Scott W. and I played around and it took us about a half hour to get a group started and each other added to it. Creating the group wasn't hard but 3degrees wouldn't cooperate when it came time to add people other than the group creator to the group. Second, the only thing it has that MSN IM does not is that you can share music (juke box style), you can share graphics files (I understand why this is so but it will not be useful to anyone but teenagers with the graphics files only limitation), and you can send winks (which grow old in about two minutes). Third, it's sad to say but I think Scott W. hit the mark when he said, "I bet this thing turns into a porn service in a couple weeks."