Update: First off, Ben Homer has what seems to be the very first coverage ever of this, so my apologies. Secondly, my commentors mentioned that this isn't a Microsoft project but actually a Skinker project. Microsoft has a minority stake in Skinkers and they did some work with Microsoft Research, but it's being driven by Skinker. Finally, people are saying this doesn't compete with Joost, and I can buy that. It still seems like they would be competing for similar ad dollars and that their two paths have to converge at some point (Joost doing live TV or LiveStation doing recorded TV). But as of right now, no, LiveStation is not a Joost killer. Sorry about the crazy title.
Microsoft is unveiling LiveStation which is an application that will enable live television on the desktop. The project uses Silverlight technology and has been touted as Microsoft's attempt at a "Joost killer". I think this is fairly old (the earliest reference I can find is 44 days ago on P2P File sharing)but I just caught it today and there seems to be a swarm of news around it including Mashable, Steve Clayton, D'Technology Weblog, and Ars Technica.
As other people have noted, the big news with LiveStation is that it's using Silverlight and could very easily become Silverlight's killer app. The project is a combined effort by Microsoft Research and Skinkers, a communication platform company. The final version is due out in October but the LiveStation site has a signup form for early beta access. LiveStation differs from Joost in that it actually displays live TV as opposed to Joost's prerecorded shows. That could be a compelling application from both a technology standpoint (live streaming Silverlight content) and a content standpoint (sports anyone?). As I find out more and/or get an invite, I'll post here. In the meantime there are a couple of videos up that talk about LiveStation in detail. It will be interesting to see if this has any implications for Silverlight oustide the browser.