Even though the update isn't yet... live, you can't still see the new version if you click on the URLs from this post. They contain a parameter that triggers the updated interface and set a cookie. To compare them with the results from the old Live Search, open a different browser and perform the same searches directly from live.com.
Old version:
New version:
The new design moves the search box to the left, transform the tabs for other search engines into links, changes the text colors and the fonts (from Verdana to Arial) and the page is easier to read. The page also loads faster because Microsoft optimized the code (7.23 KB vs 15.9KB when you search for [Google]).
Microsoft says the new index is four times bigger than the previous one, but that's not a measure for quality. As you can see in the screenshot above, Live Search 2.0 shows two spammy web pages at #3 and #4 when you search for [Google Pack]. The same pages have lower ranks in the previous version.
Microsoft updated the instant answers to show more information about celebrities, including a Celebrity XRank, which is similar to Google Hot Trends. You'll also find rich information about products from MSN Shopping.
The new video search engine shows video previews while you hover over the thumbnails. This is useful to decide if a video is right for you, but it's also very easy to accidentally trigger a video while moving your mouse on the page. Unfortunately, if you click on the thumbnail of a YouTube/MySpace/Metacafe video, Microsoft will only show the embedded player, without any description, comments, ratings. Other videos, like those from MSN Video, are played at their original page.
Live Search detecting more subtle misspellings and includes related terms by expanding your query. "The new Live Search does a much better job in predicting the intent of the query to return the best results possible. New investments improve the search service's ability to read and understand queries in a way that more accurately determines intent despite common problems such as spelling errors, stop words, punctuation and synonyms," says Microsoft in a press release.
The new ranking algorithm is closer to Google, although it seems to not be influenced too much by the number of links or their importance. A search for [Google OS] returns as the fourth result a page that was linked from this blog and very few other sites.
Live Search is still far behind Google in terms of quality, but this is the first time when Microsoft focuses on the important things: relevance, speed and user interface.
Update: Read this very cool live blogging from Microsoft's Searchification event where they launched these updates. The post was written by Vanessa Fox, a former Google employee.