This sounds like a friendfeed-like feature.  Apparently a lot of people are now seeing this on their Live Spaces and are getting their panties in a knot.  Microsoft needs to be more forthcoming when features are going to be released and how to use or set permissions on said features.  Too bad that the Live teams have all but stopped posting on their team sites.  It used to be that they all communicated very well when Live was being launched a couple years ago.  Now getting information from them is like pulling teeth.  

WILL THIS UPDATE BE PART OF WAVE 3 UPDATE.

Messenger IM Control/Presence - Allow a Messenger icon to appear next to my display picture if I'm online, away, or anything that isn't offline. If my friends see I'm online, they can just press the Messenger icon, and chat with me. Nifty, eh?  If it's a stranger, then he/she can chat with me in a Web Messenger that doesn't show my e-mail or anything. Perfect solution.

Live ID is flawed bigtime. Xbox.com a MS product refuses to recognize associated ID's. Being Xbox Live was first my old hotmail is it's ID. Now with an associated Live ID as my day to day ID I must switch to the old hotmail before xbox.com signs me on? Other then that I think Live ID is awesome.