Everything is new; from the installer which is much smarter to install what they are needed rather than giving us some unuseful info & help. Live Messenger, Live Writer, Live Photo Gallery, and Live Movie maker are completely redesign. Although I am yet to find any significant improvement for Live Writer besides Photo album, it is much easier to recognize non-blogging content manager like Drupal. I like that =) For messenger, it's supported new animation display and is much cleaner UI.
They all are quite cool update; check them out here.
Added 1/16/2009: you can grab standalone installer here; about 134MB total.