I had a company on MS Office Live Small Business. We set their email, contacts, and calendaring system up a few years ago on a hosted MS Exchange Server through 4Smartphone.com. It worked great. When MS came out with what they call Hotmail Exchange ActiveSync late last year, partially to save some money, we moved them to that system with similar capability. Because MS Office Live Small Business is built on Hotmail, you can run Hotmail Exchange ActiveSync into MS Outlook. You set it up though the Hotmail Outlook Connector. Hotmail Exchange ActiveSync lacks task syncing but otherwise works great.
When MS Office 365 comes out later this year, all MS Office Live Small Business users will be moved to that system. It’ll cost a bit more but include a lot more functionality. We’ll look at changing this company to over to Office 365 hosted Exchange Server at that point.