Windows Live SkyDrive was updated today. It's a place to store 500MB of files for free. I signed up for the open beta and I'm currently uploading files. So far I love the UI (and the name!) All the traffic is encrypted via SSL and you can set the permissions of each folder. If I could mount this as a drive and/or schedule nightly backups to this it would be a killer app.
The SkyDrive team blog has more info about what this update includes: