The Live SDK contains the Live Connect APIs, which provide programmatic access to Live web services with a set of libraries that enables your apps to work with data in over 500 million user accounts in Windows Live ID, SkyDrive, Hotmail, and Windows Live Messenger. The Live SDK enables access to users’ identity profile info and allows your apps to:

Easily personalize your users’ experience
Take advantage of single sign-on scenarios using Windows Live ID in Windows Developer Preview
Upload and download photos and documents in SkyDrive
Create and update contacts, calendars, and events in Hotmail
Send instant messages and display buddies’ presence info in Windows Live Messenger, by means of the industry-standard Extensible Messaging and Presence Protocol (XMPP).