It now has (amongst other things):

• Inline spell checking
• Direct link to blog management web page
• Direct link to blog stats web page
• Easier to link to previous posts
• Can add categories

Those last three work with WordPress at least.

So I’m happy that the features release match many of the ones I was looking for.  Now if it could have an MDI interface…

Check it out.  Note that http://writer.live.com/ is not pointing to the new stuff for some reason.