On February 1st we released the latest version of the Windows Azure Tools and SDK Version 1.1. This release adds support for Windows Azure mountable Drives as well as numerous bug fixes.
The new Drives feature is designed to support moving applications that currently address the NTFS file system into the cloud. With this feature you can upload or create a special Windows Azure blob that is mountable like a VHD such that a drive letter can be assigned and used by a Windows Azure program.
This feature is in addition to the use of standard persistent Windows Azure Blob, Table and Queue storage as well as the local non-persistent storage that can be used for caching and other local functions on every Windows Azure Server.
This SDK also implements the Windows Azure OS version support which will allow a Windows Azure application to choose the appropriate guest OS version that it wants to run with.