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A beta release of Windows Azure Drive is now available. It was announced as XDrive at PDC 2009.
Customers have told us that they want to take their already running Windows applications and run them in the cloud using the standard Windows NTFS APIs, and make sure that the data is durable. With Windows Azure Drive, your Windows Azure applications running in the cloud can use existing NTFS APIs to access a durable drive.
This can significantly ease the migration of existing Windows applications to the cloud, enabling customers a more seamless migration experience while simultaneously reducing the amount of time it takes to move their applications from your own Windows environment to a Windows Azure environment. The Windows Azure application can read from or write to a drive letter (e.g., X:\) that represents a durable NTFS volume for storing and accessing data.
The durable drive is implemented as a Windows Azure Page Blob containing an NTFS-formatted Virtual Hard Drive (VHD).
For more information, see Beta Release of Windows Azure Drive on the Windows Azure Team Blog.
More detailed information can be found in the technical white paper here: http://go.microsoft.com/?linkid=9710117
As well as in MSDN documentation here: http://msdn.microsoft.com/en-us/library/ee924681.aspx
Bruce D. Kyle ISV Architect Evangelist | Microsoft Corporation