It appears from the chatter that Microsoft is either still working out the kinks in the past update or rolling out a new update. We have two forum posts that suggest this behavior:
"Anyone else see the update rolled back?"
No I see a shake up going on right now
I think I have never seen such an awful SERPS in my life. It's a total disaster now. Lot of widget-in-domain.com, shopzillas, and spammy junk.
It looks like link quantity rules, and link quality doesn't matter. I can see websites that have nothing but 1,000s of links from article directories and spammy blogs ranking 1st to 3rd in a quite competitive niches.
The discussion continues about how much webmasters and SEOs dislike the current state of Live Search.
Forum discussion at WebmasterWorld.