The idea of on-line storage is nothing new. Four or five years ago there was a service that would sync files to a server between multiple machines. Amazon has had something similar for awhile, although it is a pay service.
One bit I found particularly odd:
"With Live Drive, all your information - movies, music, tax information, a high-definition videoconference you had with your grandmother, whatever - could be accessible from anywhere, on any device." [Emphasis mine]
I found this a bit chilling that anyone would even consider putting their tax info in a place they did not have a lot of control over. Microsoft still has a way to go to earn at least my trust, and frankly I would not even put that kind of info on GDrive. At least if it is on my machine I can disconnect my machine from the internet, or copy the file to a CD, etc. to keep that kind of information as private as possible.
Also, given some recent things from the RIAA or MPAA, what kind of responsibility would you have if someone cracked into your Live Drive and illegally downloaded the music and videos you had there? You legally owned them, however I am sure the alphabet groups could make something of a case that you were distributing them.
Don't get me wrong - it is a good idea. However at least right now internet storage has a ways to go to prove itself.