Some interesting info on the what, how and why of the Windows Live ID SDK:

Microsoft recently opened up its Windows Live ID service to third-party web developers. Windows Live ID—formerly known as Microsoft Passport—is a web-based authentication service that allows applications such as Microsoft Hotmail to identify users. The public release adds a number of features that were missing from the alpha version, such as sample code in ASP.NET, Ruby, Java, Perl, Python, and PHP, as well as improved documentation. The service is available free of charge to all web developers, but there is a Terms of Use agreement that places limits on how the service may be used, for the most part to try and dissuade people from using it for the purposes of spamming.

Microsoft aims for online supremacy, opens up Windows Live ID