As reported previously I was unable to get the live office connection to work for me. However after checking out the Live Workspaces Forum today I found some help - installing an update to Vista worked for me.
I will post all the instructions provided as they cannot be linked to specifically and will get lost in a long forum thread.
This was posted by Kavitha R
Sorry to hear that you are having trouble with the Office Live Add-in. Here are a few things to try to resolve the issues:
HP Laptop nx6320 1GB RAM 1hr 50 mins - cleanup reclaimed ~800mb - running Vista Business
3 pcs all P4 2GB RAM ran in just under an hour - didn't check the cleanup savings - all running Vista Business.
1 laptop running Vista Ultimate refused to run the service pack as it said it didn't have right language pack (English) installed - which is bollocks but there ya go - cant argue with that. I will troubleshoot it later.
Vista 64 box not installed yet, the download of the service pack failed half way through - trying again now.
I haven't yet upgraded my main work machine - that's a job for this afternoon.
Windows Vista Blog - release notes
What to do when SP1 doesn't come down through automatic updates
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