Live search is enhancing their search even more digging into cloaking stuff. According to them,

One of the biggest challenges with relevancy is how to distinguish legitimate information from various forms of search spam. This is one area that we’ve made especially good progress in over the last 8 months through a suite of tools that helps us detect, evaluate and manage spam. One of these tools is an extension to MSNBot, giving us an additional way to detect cloaking. (It should be noted that not all cloaking is spam related and we do our best to take this into account, however, we still don’t recommend cloaking in any situation).

There are also issues that was addressed

1.AdSense/Overture reporting - Initially there was a bug in our crawler that caused it to download all content on your page, including ad blocks.
2.Distort site statistics with unfilterable bot traffic
3. Pollute HTTP logs with inappropriate terms
4. Microsoft isn’t responding to questions

They are indeed improving their search that are being manipulated in means like cloaking where previously not being given an improtance on ranking and search.

Duplicate content should also be addressed and if some proxy sites hijacking where creating an the same content on search with proxy index page.