I too have been testing this, and it is HORRIBLE.
What makes me say this is the way it handles your contacts.
Example:
You have a contact in your phone as John Doe with a phone number or two, email address and IM address.
You also have John Doe in your MSN "buddy list" as
JDoe@hotmail.com (for example).
WHen you SYNC your contacts, Live Messenger Mobile will add
JDoe@Hotmail.com into your contacts as a seperate entry, instead of pulling it from the entry already in your contacts.
ARGH!!!!