I've played a bit with French-English translation and to me the Live Translator seems better than Google's version.
For other languages, Google wins (e.g. try translating with both engines from Chinese "用部落格分享照片、影音、趣味小工具和最愛清單,盡情秀出你自己" describing Windows Live Spaces :-))
The translation of a webpage is really interesting. I like the side-by-side comparison, with phrase hightlighting. See for instance the translation of CNN's home page.
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For me it's not going to be an immediate bye-bye Google, but from now on I'll check both engines when I'll need a translation...
Try it out for yourself at http://translator.live.com
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