SQL Server 2008 Spatial...I like the sound of that. CTP (Community Technology Preview) is available for free evaluation download now. It's coming and I can't wait for you to see it. Since Ed Katibah and I presented at Location Intelligence he and I have been talking more and more about some exciting synergies between our products. SQL Server becomes the data engine and Virtual Earth is the presentation layer. Something like the following would be your basic application data flow.

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I also wanted to point out some reference material:

If you don't want to host your own SQL Server, did you know about the SQL Server Data Services? Microsoft will host your data in the cloud in SQL Servers. Perhaps they'll add some of the spatial queries to the hosting services? Perhaps. Either way, let SQL Server crank away at analyzing your data and let Virtual Earth visualize the results.

And, Johannes Kebeck continues to crank out some serious SQL + VE code on his blog. Expect greatness in the months and years to come.

CP