So what's the deal with this new service? Well, apparently it's going to be a large part of Vista and will be able to go cross-platform - from mobile to PC to Xbox. Basically, log-on with your phone and someone on their PC will see that you're Live. It's meant to work like a massive (but easy to set up) network.
At the Microsoft press conference, the demostration showed that it will look very similar to the current Xbox Live setup. The mobile version of the system was also demonstrated as well. The functionality takes a similar approach, but obviously, the menus will be downsized and specifically made for being used on the go.
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