Windows Live SkyDrive was updated today. It's a place to store 500MB of files for free. I signed up for the open beta and I'm currently uploading files. So far I love the UI (and the name!) All the traffic is encrypted via SSL and you can set the permissions of each folder. If I could mount this as a drive and/or schedule nightly backups to this it would be a killer app.

The SkyDrive team blog has more info about what this update includes:

An upgraded look and feel — new graphics to go along with your new features!

"Also on SkyDrive" — easily get back to the SkyDrives you’ve recently visited

Thumbnail images — we heard you loud and clear, and now you can see thumbnails of your image files

Drag and drop your files — sick of our five-at-a-time upload limit? Drag and drop your files right onto your SkyDrive

Embed your stuff anywhere — with just a few clicks, post your files and folders anywhere you can post html