The previous version shut off Aero glass, which was highly undesirable. Here's the update, from Microsoft:
Now that we are out of our holiday blackout period for releases, we’re happy to announce that the next Live Mesh for Windows client update will (at long last!) be available later today. Thank you for your patience, and please see below for the details.
Fixes
Conflict-handling improved for duplicate files and folders
Live Mesh no longer disables Aero in Windows 7
Continued improvements to P2P synchronization
Minor usability improvements
This update will bring your Windows Live Mesh client up to version 0.9.3424.14.
It's unclear as if this writing (6:55 pm EST) if the update is out yet. But if not, I assume it will be soon. I'll check...
UPDATE: They still haven't posted this update (!!) ... The current version of the EXE is 0.9.3424.5 as I write this. Unreal.